Short-Term Let Licensing and Control Zone Proposals

The Scottish Government published their response to their consultation on short-term let regulation in December 2020. This can be accessed here.

Despite the volume of correspondence questioning the timing of the regulations due to the impact of Covid-19, not to mention the concerns from local authorities about the pressures they will face from a financial and resourcing perspective, the Scottish Government will take forward their regulations to introduce a licensing scheme and control areas.

This follows a letter of representation from leaders from across Scotland’s tourism industry who called on the Scottish Government to delay its plans for regulations that threaten to cripple short-term letting. The group of 38 prominent figures from across the industry wrote to the Minister for Local Government, Housing, and Planning, Kevin Stewart, and his ministerial colleagues, warning him that licensing poses a significant threat to the £723million sector at a crucial time: Letter to Kevin Stewart MSP 26 October 2020.

ASSC Chief Executive, Fiona Campbell, said:

“The regulations that self-catering is facing may well inflict the kind of damage on our vital sector, key to creating the memory-making holidays Scotland is famous for, from which it will never recover.

“That is why our friends, peers, and colleagues from across Scottish tourism have joined with us to send this clear, unambiguous, and direct message to Mr Stewart and his ministerial colleagues – rethink this or you’ll hurt us irreversibly.

“COVID-19 has done a lot of damage to Scotland’s economy, the last thing we need is to compound it with this poorly thought out, ham-fisted, and counterproductive act of sabotage”

In a poll of 1,184 members of the ASSC, one-in-three operators said that the heavy-handed regulations would cause their businesses to become unviable. Worse still, nearly half (49 percent) of operators said that they would leave the industry, which supports thousands of jobs across the country, and a third of those said they would leave their proprieties empty or convert them to private use.

Read the results of the survey: ASSC licensing survey.

Read the press release: Licensing Scheme Threatens to Destroy Self-Catering.

Despite this, the Scottish Government laid the regulations, known as draft Scottish Statutory Instruments (SSIs), before parliament on 14th December 2020 – the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2021 and the Town and Country Planning (Short-term Let Control Areas) (Scotland) Regulations 2021.

The commercial reality is that guests will simply not book if their bookings are conditional and subject to a term between owner and guest that says the owner can cancel the booking if they cannot either obtain or renew a licence. Kevin Stewart MSP, Minster for Local Government, Housing and Planning, outlined in a letter of 11 Dec 2020 letter to Willie Rennie MSP: “expects the position in respect of refunds for future bookings affected by refusal, suspension or revocation of a licence to be covered by booking terms and conditions in the same way as any other scenario in which the accommodation becomes unexpectedly unavailable, such as through fire damage or flood”. This shows a contemptible lack of understanding of commercial contracts in the tourism sector. Read more: The Booking Problem

In terms of the next steps in parliament, the Delegated Powers and Law Reform Committee will review these SSIs for any technical or drafting issues and then the Local Government and Communities Committee will scrutinise them from a policy perspective. The Local Government Committee have issued a call for evidence on the regulations, open until 22 January 2021, which asks the following questions of affected stakeholders:

1. Do the proposed changes strike the correct balance between protecting the long-term sustainability of local communities and promoting tourism and strong local economies?

• No – the proposed changes fall far short of striking the correct balance between protecting the long-term sustainability of local communities and promoting tourism and strong local economies.
• No – a licensing system is a blunt tool to fix a perceived and localised problem of amateur online platform 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.
• No – now is not the time to introduce these regulations given the impact of Covid-19 on the Scottish tourism sector. Instead, as requested by tourism and business stakeholders, the Scottish Government should postpone their regulations in order to give the industry time to recover from the devastating effect of the pandemic.
• The prioritisation of this issue during a global pandemic, when related pieces of legislation such as the transient visitor levy have been dropped, and when many in the tourism industry are struggling for survival, needs to be seriously questioned.

2. Has the Scottish Government’s defined short terms lets in a clear and correct way in the legislation?

• No – The scope of the regulations includes traditional self-catering and B&Bs operators, who are already regulated,. This could have been addressed by proper consultation with industry.
• This unintended consequence is as a result of the truncated nature of the consultation process, the rushed timeline from the Scottish Government to fulfil a political objective, and the failure to properly assess the consequences of the regulations.

3. Will local authorities have adequate resources, powers and expertise to make a success of their new powers and duties?

• No – as detailed by the local authority responses to the consultation, many local councils are concerned about the resource implications of the regulations at a time when their budgets are already stretched, as well as the administrative burden and the lack of specific Scottish Government funding for set-up costs.
• Additional burdens will be placed on local authority planning and licensing teams to manage the requirements of a new scheme at a time when they can least afford it – despite claims that councils will be able to recoup this later down the line through fees. A proper impact assessment of the costs is required and it underlines the case that a postponement of the regulations is desirable.

These SSIs are not amendable and MSPs can only vote to accept or reject them. If the Scottish Parliament approves the SSIs, they will come into force on 1 April 2021. Local councils will have until 1 April 2022 to establish a licensing scheme and existing ‘hosts’/operators will have until 1 April 2023 to apply for a licence.

The Association of Scotland’s Self-Caterers has a number of concerns about the draft SSIs and will continue to make representations on your behalf to both the Scottish Government, the Short-Term Let Delivery Group as well as the parliamentary committees, and we will keep you updated with relevant developments.

The ASSC submitted the following evidence to the Committee following the publication of the BRIA on 10th December:

ASSC written evidence for LGC Committee – December 2020

ASSC Notes on BRIA – December 2020

The ASSC also wrote to the Cabinet Secretary for Rural Economy and Tourism on 21st December 2020 with further concerns, including that B&Bs now fall within the scope of the regulations: ASSC Letter to Fergus Ewing 21.12.20

We are compiling further evidence to submit to the Committee by 22nd January, which we will share in due course.

Licensing or Registration

The ASSC believes 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.

The ASSC has prepared a paper outlining the implications of registration and licensing:
Read more here.

In February 2020, the ASSC launched a policy proposal paper: Forward Together: A Collaborative Approach to Short-Term Letting. This has now been given a Covid-19 overlay (August 2020).

Contrary to the current media narrative, short-term lets are not a new phenomenon. Given that the ASSC has acted as the trusted voice of the self-catering sector for over forty years, we are well aware that short-term lets have always formed a crucial supportive part of Scotland’s rich tourism offering.

The self-catering sector brings around £723m of economic activity to Scotland each year. With such figures in mind, it is little wonder that the Scottish Government have welcomed the economic benefits of our sector, as well as the development of new models of short-term letting to Scotland.

Building on previous policy recommendations and engagement with the Scottish Government, the ASSC set out a series of solutions to the main issues identified in the consultation process and which can assist the Scottish Government as they take forward the details of the scheme and help inform the regulations.

This paper seeks to support the Scottish Government’s commitment to regulate the short-term rental sector in Scotland. Overall, it aims to:

• Ensure the responsible growth and sustainability of the self-catering industry
• Strike an appropriate balance for the tourist economy, visitors and local residents
• Provide a proportionate, evidence-based and future proofed solution for national and local government
• Provide consumer protection for visitors using short-term lets in Scotland.
• Find out more: 2020_ForwardTogether

Find out what self-caterers had to say at the STL Delivery Group Workshop in October 2020.

Find out what questions ASSC members have asked about the proposals: STL Questions compilation

Read Airbnb’s response to the proposals.

In recent times, the self-catering and short-term letting sector has been used as a convenient scapegoat for longstanding failures in housing policy. However, the challenges facing Scotland are far more multifaceted than the existence and growth of short-term and holiday lets alone. Find out more.

What do Local Authorities think?

• 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.
• Find out more.

Parliamentary Questions Tabled on the Subject: