Town halls blame drink law for £95m deficit

The Local Government Association (LGA)  has warned that round-the-clock drinking laws have left a £95m "black hole" in town hall budgets.

The body representing councilssaid the government had not kept its promise that the cost of processing new licences would not leave local authorities out of pocket.

It said the shortfall from licensing fees ran into tens of millions of pounds every year, leaving local authorities needing to raise council tax bills to make up the difference.

The LGA said councils will have spent an estimated £200m over the past three years on implementing and enforcing the Licensing Act, which came into force in November 2005.

But their income from administering the law came to about £105m.  

LGA chairman Lord Bruce-Lockhart said: "Councils have pressed ministers at every possible opportunity to fulfil their pledge that the new licensing regime would not leave council taxpayers out of pocket.

"Despite repeated assurances to the contrary, local authorities have been left facing a financial black hole.

"The new regime came into being with a clear commitment from central government that they would meet the costs of implementing the new legislation.

"Councils are committed to delivering an ever better deal for the taxpayer, but the only option local authorities will have if they continue to lose £30m on licensing each year will be to pass the deficit on to local people through their council tax. This is not acceptable."