BIRMINGHAM CITY COUNCIL
REPORT OF THE DIRECTOR OF REGULATION AND ENFORCEMENT
TO THE LICENSING AND PUBLIC PROTECTION COMMITTEE
18th SEPTEMBER 2013
ALL WARDS
NEW STATUTORY LICENSING REGIME UNDER THE SCRAP METAL DEALERS ACT 2013
1. Summary
1.1 This report outlines the statutory licensing regime that comes into force on the 1 October 2013.
1.2 The existing registration scheme administered by local authorities under the Scrap Metal Dealers Act 1964 will cease to have effect and will be replaced by a new licensing regime. This report seeks the Committee’s consideration of the new regime and approval for the implementation of new arrangements, including transitional arrangements, compliance checks and charging structure.
1.3 From 1 October 2013 all persons carrying on a business involving scrap metal trading or motor salvage trading will require a licence before they can operate
2. Recommendations
2.1 That the report and statutory requirement to implement the Scrap Metal Dealers Act 2013 licensing arrangements be noted.
2.2 That the proposals for licensing scrap metal dealers by Birmingham City Council be approved with effect from 1st October 2013.
2.3 That the proposed fees detailed in paragraph 8.2 be approved.
2.4 That the scheme of delegations outlined in paragraph 13 be approved.
Contact Officer: Chris Neville, Head of Licensing
Telephone: 0121 303 6103
Email:
Originating Officer: Martyn Smith, Operations Manager (ECU Lead)
3. Crime Reduction, Compliance and Enforcement Context
3.1 In 2012 a National Metal Theft Taskforce was established by the Home Office with a programme aimed at supporting law enforcement agencies to tackle a national surge in metal theft. Alongside the Taskforce activities, Government undertook a review of relevant legislation and in response introduced two new statutory provisions which were to prohibit the sale of scrap metal for cash payments and to replace the existing registration scheme for scrap metal dealers and collectors with a chargeable licensing regime.
3.2 The revised legislation (Scrap Metal Dealers Act 2013) received Royal Assent in February 2013; however the commencement date for the legislation was only determined in June 2013 with guidance to local authorities on the legislation and fees being issued by the Local Government Association and Home Office in August 2013.
3.3 The new licensing regime does not permit the use of licensing fees to underwrite enforcement against un-licensed operators. Enforcement against unlicensed operators will have to be undertaken within the core resources of the Police and local authorities.
3.4 To support compliance and the introduction of the SMDA your officers undertook an enforcement and awareness raising programme in 2012/13 with Birmingham Community Safety Partnership and West Midlands Police and the programme is outlined in Appendix 1. Across the West Midlands region multi-agency operations have secured a 57% reduction in metal theft over the last 12 months, which corresponds to 3,000 fewer crimes.
4. New Licensing Regimes for Scrap Metal Dealers and Collectors - Overview
4.1 Local authorities are required to implement the new regime from 1 October 2013, which is set out in the Scrap Metal Dealers Act 2013 (SMDA). This new Act replaces the previous registration system for scrap metal dealers under the 1964 Scrap Metal Dealers Act. The new Act also incorporates the existing registration requirements for motor salvage operators which are currently set out in the Vehicles (Crime) Act 2001 and Motor Salvage Operators Regulations 2002.
4.2 In Birmingham the existing registration regime under the SMDA 1964 and Motor Salvage Operators Regulations 2002 are administered by an officer within the Environmental Protection Team of Regulation and Enforcement.
4.3 The SMDA will require two regulatory bodies to implement new arrangements as from 1st October 2013:
a) Local authorities have a statutory duty to implement and administer licensing arrangements for all scrap metal dealers, scrap metal collectors and motor salvage operators that reside or operate within its area. The licensing regime is based on the legislation for alcohol licences created in the Licensing Act 2003. Every scrap metal dealer will be required to have a licence, and operating without one will be a criminal offence. Some operators will carry out more than one licensable activity, for example a scrap dealer may also collect scrap metal in which case a dealer’s site licence and a mobile collector’s licence would be required.
b) The Environment Agency has a statutory duty to maintain a national public register of all licence holders under the SMDA. Local authorities will be required to submit data on licence holders to the Agency. Guidance on the frequency and format of this data exchange is awaited from Government. The Environment Agency cannot charge a fee for its role;
4.4 A SMDA licence must be in the form of a ‘site licence’ or a ‘collectors licence’ and a site licence can authorise the licensee to carry on a business at any site (or sites) within a local authority’s area identified in the licence.
4.5 The SMDA states that a local authority must not issue a licence unless it is satisfied the applicant is a suitable person to carry on business as a scrap metal dealer – the ‘suitable persons test’. In the case of companies and partnerships this test extends to partners in a partnership, directors, company secretaries or shadow directors. The suitable persons test requires the applicant to submit a criminal records certificate (Basic Disclosure Certificate) issued by Disclosure Scotland. The local authority is required to consider an application against a prescribed list of relevant criminal offences and may consult with other agencies, including the Police when determining an application.
5. Key Elements of the 2013 SMDA
5.1 The 2013 SMDA will provide effective and proportionate regulation of the sector through a local authority run licensing regime that will support legitimate dealers. The Act differs from the old registration regime in a number of ways:
I. The new licensing regime enables control of all operators that are covered by the legislation. An operator who operates without a valid licence commits a criminal offence and a local authority or the Police can seek a Closure Order [Court Order].
II. The regime requires the implementation of a full range of licensing processes, including applications, assessment of suitability of the applicant, including licence determinations, renewals, variations, appeals, appeal hearings and revocations.
III. There is a statutory right for the Police to make representation about a licence or objection to the granting of a licence by the local authority.
IV. Licensed operators details have to be provided to the Environment Agency for publication on a national public register.
V. The regime supports compliance inspections and enforcement follow-up of licensed operators.
VI. All relevant operators must pay an application fee, set by individual local authorities, before they can operate.
VII. It is a criminal offence to operate without a valid licence.
VIII. All relevant operators must obtain a licence from each and every local authority area in which they carry on a business.
IX. Licence applicants must satisfy the requirements of a ‘Suitable Persons Test’ before a licence can be granted.
6. Transitional Arrangements
6.1 The Home Office has set out transitional arrangements that relate to scrap metal dealers, scrap metal collectors and motor salvage operators that hold current registrations under the 1964 SMDA on 1 October 2013. The transitional arrangements are as follows:
I. All relevant operators can apply for a scrap metal dealers licence from 1 October.
II. A scrap metal operator who is currently registered under the SMDA 1964 or Vehicles (Crime) Act 2001 needs to submit an application on or by 15 October and will be deemed to have a temporary licence which is valid until a licence ‘decision’ is issued. The decision is based upon whether the applicant satisfies the ‘suitable person’ test. While their application is being considered by the local authority, these operators will be able to operate as if they had a licence so as to maintain business continuity.
III. For those seeking a licence under the transitional arrangements the Home Office is recommending that local authorities complete checks to assess applicants’ suitability to hold a licence and determine licences by 1 December.
IV. If a scrap metal dealer or motor salvage operator who is currently registered does not submit an application under the transitional arrangements on or by 15 October their deemed licence will lapse on 16 October. A deemed temporary licence which has lapsed does not give rise to a right to appeal. The dealer must submit an application and wait for a licence to be issued before they can trade legally.
V. A local authority can impose conditions on a deemed temporary licence pending an appeal for the refusal of a licence.
VI. Scrap metal dealers/collectors or motor salvage operators who are not registered under the SMDA 1964 or the Vehicles (Crime) Act 2001, can apply for a scrap metal dealers licence from 1 October but must wait for a licence to be issued before they can operate.
VII. The offence of buying scrap metal for cash will come into force on 1 October 2013
VIII. Local authority officers and police officers will have the right to enter and inspect scrap metal operators premises from 1 October 2013
IX. The majority of the other enforcement provisions within the SMDA will come into force on 1 December and enforcement powers are shared with the Police.
7. Fees and Charges Regime for Licence Applications
7.1 Under the existing ‘registration’ regimes no fee can be charged in the case of scrap metal dealers and itinerant collector’s registrations and a fee of £100 can be charged in the case of motor salvage operators. From 1 October 2013 a new unified licence fee framework will come into force under the SMDA.
7.2 A successful licence applicant is granted a licence that lasts for three calendar years from the date of issuing of the licence.
7.3 No statutory fee level or recommended fee level has been set by Government. The Home Office issued guidance on fees in August 2013 and the guidance is designed to secure compliance with the EU Services Directive and the Provision of Services Regulations 2009 and licensing case law. The Home Office anticipates that local authorities may wish to charge varying fees dependent upon the resource required to undertake its statutory role. For example it is suggested that the fees charged for ‘site’ licences such as scrap metal yards might be greater than that charged to ‘mobile’ collectors.
7.4 The guidance on fees issued by the Home Office is binding on local authorities. In addition to this, the Local Government Association has issued non-statutory guidance on the Act. A summary of the matters that local authorities should have regards to when setting application fees is set out in Appendix 2.
7.5 The statutory power to enable local authorities to set a licence fee, prior to the SMDA coming into force, commenced on 1 September 2013.
8. Proposed Licence Fees
8.1 Each scrap metal dealer licence application must be considered on its merits. An applicant must be accompanied by the licence fee prescribed by the relevant local authority, before the application can be considered.
8.2 The proposed scrap metal dealers licence fees are shown below:
Purpose / Proposed FeeScrap metal dealer – Site licence (first issue or renewal)* / £1335
Two sites / £2439
Three sites / £3544
Scrap metal dealer – Mobile collectors licence
(first issue or renewal)* / £322
Replacement licence (where original lost or stolen)** / £ 77
* valid for three years from date of issue
** valid for remaining duration of the original licence issued
9. Consistency of SCMDA Implementation
9.1 Local authorities are required to determine implementation policy, including compliance regulation and fee levels, locally. There is an active ‘cross border’ trade in scrap metal within the West Midlands and your officers are working with Licensing colleagues from the Midlands Neighbouring Authority Working Group and West Midlands Police in order to support consistency and information sharing.
9.2 The Local Government Association has issued non-statutory guidance to local authorities on scrap metal dealer and collector licensing and further detailed guidance relating to the new regime is anticipated from the Home Office.
9.3 Specific guidance on compliance enforcement has yet to be issued by the Home Office. Subject to the details of any future guidance your officers are currently consulting with neighbouring councils and with West Midlands Police on an integrated approach. Any regulatory activity through compliance checks will be undertaken under the terms of the existing Regulation and Enforcement Enforcement Policy.
10. Scrap Metal Dealers in Birmingham
10.1 There were 1006 scrap metal dealers registered within the Birmingham boundary as at 1 September 2013:
Type of Operator / NumberScrap metal dealer – Fixed site/yard / 38
Scrap metal dealer – Mobile/itinerant collector / 835
Motor salvage operator – Fixed site/yard / 133
10.2 From the operators currently registered in Birmingham it is likely that all the existing businesses with fixed sites will wish to apply for a licence under the new regime. The situation is much less clear in respect of mobile collectors as it is not known how many of these will wish to make licence applications. Part of the reason for this is that there has been a recent trend for multiple adults living at individual households registering as itinerant scrap metal collectors. Multiple registrants within family/household groups may account for up to 50% of current registrants and consequently a significant number may not choose to apply for a licence under the new fee paying regime. Only the person carrying on a business will be required to obtain a licence, not each individual collector.
10.3 In addition to the operators currently registered in Birmingham there are is an unknown number of mobile operators who reside outside Birmingham who may wish to trade within Birmingham from time-to-time and will consequently have to apply for a licence from Birmingham to operate within our boundary.
11. Licensing Stages
11.1 The overview of the key activities that the City Council will have to administer is set out below:
Required Activity / Additional Potential Stages Required1) Licence application received with fee
2) Suitability of applicant assessed / Consultation with the Police and/or Environment Agency
3) Licence determination
4) Notice of decision
5) If rejected: / Representation from applicant
Application hearing
Appeal to magistrates’ by applicant
6) Varying licences on application
7) Notification to the National Register
8) Compliance inspection
12. Consultation