Chamber and committees

I am happy to engage with the committee on that. We could follow up nearer the time with some thoughts about how that might work. We want to be open and transparent about that process. We would welcome the committee’s involvement in that.

We have not decided on the format per se, but I would want it to be open and to take contributions from stakeholders, local residents, communities and local authorities—the same groups that have been involved in the three consultations so far. We would revisit those stakeholders and find out how the scheme is working for them as providers and hosts, and for the users of short-term lets and those who are impacted by those lets. We want to look at that in the round and be open in doing so.

It is about having a proportionate, risk-based inspection regime. If we were to do an analysis of fees that was not founded on a risk-based inspection regime and if every property was inspected every year, the fee level would be higher. However, we are not asking local authorities to do that. That would not be proportionate.

The guidance will set out the detail of how we will ask local authorities to set up a risk-based inspection system. A range of issues that could be brought to the local authority’s attention—for example, if there had been any concerns about particular properties or about somebody being a fit and proper person—would determine which properties might be inspected more than others. The local authorities understand that approach and proportionate fees. That is what we will ask them to do and it will help considerably in keeping the costs down. That is probably where the difference in the figures lies.

First, we expect all relevant authorities to use all the powers that are available to them to deal with antisocial behaviour. Existing antisocial behaviour legislation is, however, better suited to handling issues with longer-term residents when follow up and enforcement is more straightforward. I am sure that Willie Coffey has had to deal with cases along those lines, as I have, and he will know that it takes some time to work through the legislative process and to support people in doing that.

The licensing scheme will give local authorities and Police Scotland transparency by letting them know who the owners of short-term lets are and ensuring that they are fit and proper people to hold a licence, including whether they have had issues with antisocial behaviour. Local authorities will have the power to use the scheme appropriately to meet the needs of their area.

Local authorities could also include proactive conditions so that, for example, if people in a big holiday house have been annoying the neighbours by drinking all day and all night, they could include a condition that alcohol cannot be consumed on the property after a certain time. They could do that proactively rather than having to deal with the consequences of antisocial behaviour. It is about giving local authorities the appropriate powers.

Licensing authorities might also wish to include a condition requiring the licence holder to manage their premises in a reasonably practicable way to prevent antisocial behaviour; I have just given an example of how. The draft guidance that was published in June includes a template for additional conditions relating to antisocial behaviour. We expect local authorities to impose proportionate additional conditions only when they are necessary, but if a property has been causing concern, the local authority might want to consider that.

We considered registration as part of the 2019 consultation, and we have also considered the proposals that the Association of Scotland’s Self Caterers made earlier this year for registered accommodations to be exempt from the licensing scheme. We do not believe that registration offers the same protections as licensing does to guests, neighbours and local communities. To be robust and effective, a registration scheme would need to involve many of the same requirements as the licensing scheme. We understand that the policy intention of those proposals for registration would be to ensure compliance with broadly the same mandatory conditions as are set out in the licensing scheme. However, we did not see a draft registration scheme, and it is not clear how such a scheme would be enforced.

My main point is that I do not think that registration would include any provision for a fit and proper person test, or additional conditions to be attached to the registration. Those are important components of the licensing scheme, which a parallel registration scheme would potentially undermine. That fit and proper person test is important, not least from the point of view of safety. The committee heard concerns from Police Scotland about possible criminal activity.

The alternative was given full consideration, but we believe that the licensing scheme as proposed is proportionate—not onerous—and provides a level of protection for those who use short-term lets.

The licensing scheme seeks to ensure that every short-term let across Scotland meets basic safety standards. Those should be the same whether the let is in Edinburgh or the rural Highlands. That is important for urban and rural areas, and for businesses large and small. There needs to be a level playing field.

During the consultation and in on-going correspondence we have heard from residents in many places across Scotland including Glasgow, Ayr, Applecross in the Highlands, Loch Lomond and the Trossachs national park, the Isle of Harris, North Berwick, St Andrews and West Linton, among others. They have highlighted a range of concerns about short-term lets including the impact on local housing supply, noise and antisocial behaviours. Those are not just urban issues.

Delivering national consistency on safety standards is also important, and allowing and enabling local authorities to use additional powers beyond the core elements as they see fit to meet the needs of local communities. As I said earlier, we have committed to working with local authorities to review the levels of short-term let activity in the hotspot areas in the summer of 2023 to see whether any further measures are required.

Control areas came into place in April, and the City of Edinburgh Council has consulted widely on that. If it wants to move forward, it would need ministerial approval to make the whole of Edinburgh a control area. Highland Council has moved forward with just Badenoch and Strathspey, which it sees as an area of particular concern. Local authorities can use the powers if they want to and see that as a proportionate response to local issues, but they are not required to use them. I think that that is the right balance. It gives local authorities the ability to use the powers, if they so wish, and the control areas require ministerial approval.

I will ask Rachel Nicholson to come in to outline some of the penalties for offences.

As I have said in my opening remarks, we believe that the package of measures in the licensing scheme, plus the short-term let control area powers for local authorities, will be enough. We think that those will give local authorities the powers that they need to address concerns. As I have set out, Edinburgh and Highland have moved forward with proposals for control areas and other local authorities may do that, too.

However, I also flag that we would have a review in the summer of 2023, which would give us an option to look at whether more controls are required. We will be able to take stock of where we are and, if that shows that these powers are not sufficient to address areas of concern, we would have an opportunity to look at that as well as at anything that is not working with the licensing scheme, or any concerns from the tourism sector. Summer 2023 would be the opportune moment for having a look at all those things.

No. I think that it would have been difficult to have a specific definition that would exclude some but not others in the way that you describe. The danger in doing that is that some operators could redefine their businesses as B and Bs to avoid licensing, as I said earlier.

The point about the scheme not being onerous is important. The level of fee for a small B and B should be proportionate to the level and size of the business. I was struck by the evidence of Andrew Mitchell, from the City of Edinburgh Council, when he said, first of all, that

“The inclusion of traditional B and Bs makes sense. If they are not included, a loophole would be created, which would allow every short-term let to provide a wee breakfast and claim that they were exempt from licensing laws. We strongly support the closure of that loophole by including traditional bed and breakfasts in the definition.”

He then—this is the important bit—said:

“As I said, each local authority will deploy licensing systems that reflect what it sees as the risks. For example, if somebody is living in a property, which is more likely to be the case for traditional B and Bs, they might be subject to a less onerous inspection regime with fewer requirements.”—[Official Report, Local Government, Housing and Planning Committee, 14 December 2021; c 11-12.]

Therefore, the fee would be proportionate to that.

Traditional B and Bs should not be concerned about the proposals at all. A lot has been said that might have worried them, but I would like to say that we want them to continue. They are an important part of the tourism sector and there is nothing in the proposals that is onerous or to be concerned about. I think that local authorities will take a sensible approach to the way in which they deploy the licensing scheme that will ensure that traditional B and Bs continue to be supported and that there is nothing onerous in it for them.

I am grateful for the opportunity to speak to the two motions seeking approval for the instruments. With the committee’s permission, I intend to speak to both instruments together.

We are committed to ensuring that local authorities have appropriate regulatory powers to balance the needs and concerns of their communities with the wider economic and tourism benefits of short-term lets. We have consulted extensively to take this forward.

In 2019, we consulted on the broad principles of a regulatory framework, and that consultation showed broad support for some form of regulation. That formed the basis for the proposals to implement a licensing scheme and control areas, which were announced in January 2020. In September 2020, we launched a second consultation on detailed proposals for legislation, which was then laid in the Scottish Parliament in December 2020.

As the committee will be aware, the licensing order was withdrawn in February 2021, following concerns that were raised by some members and some tourism stakeholders. In response, we established a working group made up of a wide range of stakeholders to explore and resolve those concerns. The working group made helpful suggestions for changes to the legislation, which was reflected in the draft that we published for the third consultation in June. Further pragmatic and significant changes were made to the licensing order following careful consideration of the consultation responses that we received. The changes were set out in my letter to this committee in October and included the removal of overprovision powers and stronger guidance on fees.

I know that short-term lets bring many benefits to hosts, visitors and the Scottish economy. They are an important source of flexible and responsive accommodation for tourists and workers. However, they have also caused issues for local communities that need to be addressed.

At the heart of the licensing scheme are basic safety standards that will help to protect guests, hosts, neighbours and communities across Scotland. Many hosts will already be following those standards as a matter of compliance with existing law or best practice. We do not consider those standards to be onerous.

Where there are other problems such as noise, nuisance, littering, antisocial behaviour, the loss of residential housing stock and adverse impact on local communities, the licensing scheme, together with the control area legislation, will give local authorities the powers to address those problems. Issues arise in rural and urban areas across Scotland and we expect local authorities to use their powers to do no more or less than is necessary to tackle them.

I understand the impact that Covid-19 has had on the tourism sector, which is why this Government has supported the tourism and hospitality sector throughout the pandemic, not least through an extension of the 100 per cent non-domestic rates relief for all retail, leisure and hospitality premises for 2021-22. However, we need to put the legislation in place now, so that councils can get their licensing schemes ready. Many local residents and communities are keen to see progress on the issue and today provides the opportunity for us to make sure that that happens.

The control area regulations were laid in December 2020 and approved by the Scottish Parliament; they came into force on 1 April 2021. Control areas will help to manage high concentrations of secondary letting, where it affects the availability of residential housing or the character of a neighbourhood and they will help to restrict or prevent short-term lets in places or types of building where it is not considered appropriate. That will help local authorities to ensure that homes are used to best effect in their areas. The City of Edinburgh Council and Highland Council are both moving forward with proposals to designate control areas. The control area amendment regulations align the definition of short-term let for control area purposes with that in the licensing order.

We will continue to work with and listen to stakeholders. We will shortly reconvene the stakeholder working group to finalise the guidance on the licensing scheme and prepare for implementation. We will work with local authorities to review the levels of short-term let activity in hotspot areas in summer 2023. The review will identify whether any further measures are required to control numbers and check that we have avoided any unintended consequences.

I believe that our proposals take a robust but proportionate approach to the regulation of short-term lets and that they are right for Scottish circumstances. Therefore, I ask the committee to support the motions. I look forward to any questions that members may have.