The Cost Crisis: What the Scottish Government can do to help Scottish Tourism Businesses

Scotland’s tourism industry – of which self-catering plays an integral part – has already been through one of the most challenging times due to the impact of Covid-19 but now faces further uncertainty and economic difficulty with the cost crisis.

  • In recent days, both the Scottish and UK Governments have announced a package of measures to address rising energy bills which are of real concern to people and businesses across the country – but more can and should be done.
  • The ASSC welcomes the commitment from the Scottish Government to work with the business community to address challenges around increased costs and economic disruption. To this end, they have engaged tourism stakeholders on recommendations and views in respect of existing, new and pending regulation which could help offset the significant increase in direct costs, particularly energy.
  • Below you can find a summary of the proposals we have put to the Scottish Government. This has been supported by the Scottish Tourism Alliance.

ASSC Proposal to Scottish Government

Context

  • Short-term let licensing will come into effect on 1 October 2022, introducing new red tape for legitimate micro businesses. There is significant concern around the cost to businesses of short-term let licensing (as well as planning control areas).
  • Costs will include the licence fee itself (some councils have still to set out their proposed fees; while others are charging in excess of the figures provided in the Scottish Government’s BRIA) and layout plans (approx. £600 per premises) amongst others. This is in addition to existing compliance costs of risk assessments, EICRs, PAT testing, fire safety, insurance etc. The cost of planning permission applications has increased this year significantly. Associated fees for layouts and plans add to the expense.
  • These additional costs have fuelled a real feeling of uncertainty for self-caterers across Scotland. This, coupled the media coverage of the cost of living crisis, is already having a negative impact on operators and holidaymakers, with forward bookings already down in the autumn and winter this year.

Our Ask of the Scottish Government

  • The ASSC believes that the Scottish Government should delay the forthcoming legislation, by simply passing an SSI, amending the existing order to extend the date of implementation. For absolute clarity, we are not requesting that licensing is scrapped – Parliament has expressed its view on that matter – just that it is delayed.
  • This happened to legislation during the Covid crisis. The situation we find ourselves in now is arguably worse situation for tourism businesses in the medium to long-term.
  • Pausing the introduction of licensing would show an understanding of the immediate pressures on operators. This would be hugely welcomed by our members and would show that policymakers are supporting legitimate businesses during unprecedented times.

Our small but not insignificant ask is that short-term let licensing should be paused to allow the sector to recover from the pandemic and deal with the significant challenges ahead. Businesses and livelihoods depend on it.

 

 

 

 

 

SHORT-TERM LETS: GUEST HOUSES

There has been some recent discussion around whether or not Guest Houses are exempt from Short-Term Let Licensing. We have now received the following clarification from the Scottish Government:

“We are aware that there have been questions raised as to whether or not guest houses require a short-term let licence – specifically, those with planning consent within Use Class 7 of the Use Classes Order.

It may be helpful to set out first of all that the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 (the “Licensing Order”) does not exempt accommodation because it is in a particular use class (of the Town and Country Planning (Use Classes) (Scotland) Order 1997) for planning purposes.

Therefore some, but not all, accommodation listed in Use Class 7 is exempt from short-term let licensing. Schedule 1 of the Licensing Order lists this accommodation as

  • a hotel, which has planning permission granted for use as a hotel
  • a hostel

In addition, the following exemption will also be relevant to some Use Class 7 premises (including hotels and guest houses):

  • premises in respect of which a premises licence within the meaning of section 17 of the Licensing (Scotland) Act 2005 has effect and where the provision of accommodation is an activity listed in the operating plan as defined in section 20(4) of the 2005 Act

Guest houses were originally listed as excluded accommodation in a previous version of the Licensing Order laid in December 2020. However, in response to feedback to this draft Order we subsequently removed guest houses from the list of excluded accommodation and undertook further public consultation on this in June 2021. This reflected that, as they can be variants of home sharing, guest houses should not be automatically excluded. Further information is set out in the 2021 consultation paper (item 1 in table 2 at page 12): Short term lets – draft licensing order and business and regulatory impact assessment (BRIA): consultation – gov.scot (www.gov.scot).

Unless otherwise excluded by any of the criteria set out in Schedule 1 of the Licensing Order, use class 7 premises are therefore within scope of the definition of a short-term let in the Order laid in November 2021 and approved by the Scottish Parliament in January 2022.

The above information has been circulated to licensing authorities to clarify this matter for the purposes of determining whether or not accommodation is captured by any of the exclusions set out in Schedule 1 of the Licensing Order.

We will monitor the application of this as part of the review already announced for 2023.”

Short Term Lets – Stakeholder Engagement – Letter to IAG on Guest Houses – 8 September 2022

Letter from Dickins

ASSC Director and Managing Director of Dickins Edinburgh has written to the Convener of the Local Government, Housing and Planning Committee outlining the impact of the Cost of Living Crisis on small accommodation providers, and how the Scottish Government could ameliorate the situation.

“It is not an exaggeration to say that self-caterers in every area of Scotland are on a cliff edge as the extreme rising energy costs will make their businesses untenable.

“Therefore, we ask that you act now, passing an SSI to delay the introduction of the short term let legislation until 1 October 2026 giving thousands of self-catering and B&B businesses the chance to survive, plus giving Scotland the best chance of continuing to have a tourism sector.”

Read more: LD Letter Paul MacLennan 02022022