MIDDLESBROUGH COUNCIL

AGENDA ITEM 5

LICENSING COMMITTEE

DATE – 30 SEPTEMBER 2013

REPORT OF THE ASSISTANT DIRECTOR OF DEVELOPMENT AND PLANNING SERVICES

ITEM FOR DECISION - SCRAP METAL DEALERS ACT 2013

1.0PURPOSE OF REPORT

1.1To advise Members of the introduction of impending legislation, namely the Scrap Metal Dealer Act 2013 (‘the Act’) which will introduce a new licensing regime for Scrap Metal Dealers.

1.2To seek approval for initial licence fees to be levied, as detailed in this report, and seek delegation to the Executive Director for Neighbourhood and Communities in relation to the setting of future fees under the Act.

1.3To seek the approval of the Committee in relation to the delegation of associated functions and responsibilities under the Act, as detailed in this report.

2.0BACKGROUND

2.1The increased value of metal has caused a growing problem of metal thefts throughout the United Kingdom. The Home Office have estimated that in 2010/11 alone there were between 80,000 – 100,000 reported metal thefts affecting a wide range of sectors including transport links, electricity and telephone links, churches and schools and commercial and residential buildings. The Association of Chief Police Officers (ACPO) estimate that metal theft costs the UK economy approximately £770 millon every year.

2.2The Scrap Metal Dealers Act 2013 received Royal Assent on 28 February 2013 and comes into force on 1 October 2013.The Act replaces the current registration schemes which operate for Scrap Metal Dealers and similar traders such as Motor Salvage Operators. Under the current registration schemes local authorities have limited powers and are unable to refuse an application or impose any operating conditions in relation to Scrap Metal Dealers. In addition, under the current registration scheme there is currently no provision for local authorities to charge a registration fee to Scrap Metal Dealers.

2.3The 2013 Act maintains local authorities as the principal regulator, but gives them more powers to regulate the scrap metal industry by allowing them to refuse to grant, and revoke licences to persons whoare ‘unsuitable’.Licences will be issued for a period of 3 years.

2.4The Act places a shared responsibility for enforcement with both the local authority and the Police.

3.0 SUMMARY OF THE ACT

3.1The Act defines a Scrap Metal Dealer as a person who is for the time being carrying on a business as a scrap metal dealer, whether or not authorised by a licence.

3.2The Act states that ‘scrap metal’ includes:

  • Any old, waste or discarded metal or metallic material, and
  • Any product, article or assembly which is made from or contains metal and is broken, worn out or regarded by its last owner as having reached the end of its useful life.

However, it does not include gold, silver and any alloy of which 2% or more by weight is attributable to gold or silver.

3.3 Section 2 of the Act allows for 2 types of licence, a Site Licence and a Collectors Licence. A Site Licence must be issued by the local authority whose area the scrap metal site is situated. It requires all of the sites at which the licensee carries on the business as a Scrap Metal Dealer within the local authority area to be identified and a site manager to be named for each site.Once a Site Licence is issued the licensee will be permitted to operate from those sites as a scrap metal dealer, including transporting scrap metal to and from those sites from any local authority area.

3.4 A Collector’s Licence will permit the licensee to operate as a mobilecollector in the issuing local authority area. It allows them to collectboth commercial and domestic scrap metal. However, the licence does not permit collections of scrap metal in any other local authorityarea. To permit collections in other local authority areas, the collectorwould be required to obtain a separate licence from each localauthority whose area they wished to collect in.

3.5 Section 3 of the Act states that the licensing authority must be satisfied that an applicant is a suitable person to carry on a business as a Scrap Metal Dealer. When considering suitability, the local authority may have regard to any relevant information, including whether any enforcement action has been taken against the applicant or whethertheyhave been convicted of a relevant offence. The Secretary of Statehas made regulations in relation to the meaning of relevant offences and relevant enforcement action. In addition, the local authority may consult with other organisations to assist with determining an applicant’s suitability.

3.6 Section 10 of the Act requires that the licensee displays a copy of their licence. For a site operator this must be in a prominent place in an area accessible to the public. For mobile collectors, it must be in a mannerwhich enables the licence to be easily read by a person outside thevehicle. Failureto comply with these requirements will be a criminal offence which is punishable on conviction with a fine not exceeding level 3 on the standard scale (£1000).

3.7 Section 11 of the Act places a requirement on Scrap Metal Dealers to verify the identity of the person they are receiving the metal from including, their address and this must be verified by reference todocuments such as a passport, driving licence or documents from autility company. Again the Secretary of State has prescribed inregulations the relevant documentation which can be used to confirm identity. Failure to comply with these requirements will be a criminal offence which is punishable on conviction with a fine not exceedinglevel 3 on the standard scale.

3.8 Section 12 of the Act prohibits scrap metal dealers from making cash payments for scrap metal. Any payments must be made by cheque or by electronic transfer. Failure to comply with this requirement will be a criminal offence which is punishable on conviction with a fine not exceeding level 5 on the standard scale(£5000).

3.9 Section 13 of the Act sets out the record keeping requirements inrespect of any scrap metal received by a Scrap Metal Dealer in thecourse of their business. These include, a description of the metalpurchased, date and time of the transaction, the sellers personal details, and proof of the non cash transaction. Failure to comply with these requirements will be a criminal offence which is punishable on conviction with a fine not exceeding level 5 on the standard scale.

4.0 APPLICATION PROCESS

4.1The Act requires that Scrap Metal Dealers Licences must not be granted unless the licensing authority is satisfied that the applicant is a suitable person to carry on a business as a scrap metal dealer.

4.2When determining whether an applicant is a suitable person the licensing authority may have regard to any information that it considers relevant, including in particular:-

  • Whether the applicant or site manager has been convicted of any relevant offence;
  • Whether the applicant or site manager has been the subject of any relevant enforcement action;
  • Any previous refusal of an application for the issue or renewal of a Scrap Metal Licence (and the reasons for the refusal);
  • Any previous refusal of an application for a relevant environmental permit or registration (and the reasons for the refusal);
  • Any previous revocation of a Scrap Metal Licence (and the reasons for the revocation);
  • Whether the applicant has demonstrated that there will be in place adequate procedures to ensure that the provisions of the Act will be complied with.

4.3It is anticipated that the majority of applications will not give rise to concerns and it is proposed that the authority to grant licences where there are no concerns regarding an applicants suitability should be delegated to Officers.

4.4However, where there are concerns regarding an applicant’s suitability Members may be required from time to time to determine whether an applicant is a suitable person. It is proposed that such decisions should be made by Members of a Sub Committee made up of Members of the full Licensing Committee. The proposed delegations are set out in Appendix 1.

5.0FINANCIAL IMPLICATIONS

5.1 The income received from the application fees will be used to administer and enforce the scheme. The Act allows for each local authority to set the relevant fee for a licence, on a cost recovery basis.

5.2The Secretary of State has recently issued guidance to local authorities which outlines the issues that can be considered when setting the fee and what activities the fee can cover. They include:-

  • all the activity required with processing and granting a licence such as

considering applications and assessing the suitability of the applicantand considering whether to revoke or vary a licence

  • the costs of staff associated with supporting the service, including

senior staff with managerial responsibility for the service

  • support provided by other parts of the council to the licensing team

such as legal services

  • the cost of providing advice and guidance to applicants on what will be

a new process

  • carrying out inspections and ensuring compliance with the law
  • training for staff and councillors in the requirements of the new

legislation

  • costs associated with consulting other agencies and bodies when

considering if an applicant is a suitable person

  • working with any partners in ensuring compliance
  • making and reviewing any policies in relation to the operation of the

new licensing regime

  • issuing the licence
  • any officer time spent providing information for inclusion in the register

of dealers.

However, the Guidance makes it clear that the licence fee cannot be used to support enforcement activity against unlicensed scrap metal dealers.

5.3The Act requires that three separate fees be set for each type of licence; new application, renewal, variation.

5.4After considering the Guidance the proposed fees are as follows:

Site Licence (3 year licence)Fee

New £350 (+£195 for each additional site)

Renewal £270 (+£195 for each additional site)

Variation £50 *

Minor Variation £15 (change of personal details, ie name and address)

Collector Licence(3 year licence)

New£150

Renewal£150

Variation £50*

Minor Variation£15 (change of personal details, ie name and address)

*Any variation that adds one or more sites to a licence (including a variation froma collector to a site licence) will incur an additional cost of £65 per site for each year remaining on the licence. A variation to change a site, without adding additional sites, will incur a one-off cost of £65 for each site changed.

6.0 RECOMMENDATIONS

6.1 That Licensing Committee agrees:

6.2That the functions under the Scrap Metal Dealers Act 2013 fall within the Licensing Committee’s terms of reference, namely “To have delegated powers to exercise the functions of the Council in relation to all licensing functions except insofar as such functions are delegated to an officer”.

6.3To establish a Licensing Sub Committee consisting of three Members of the Licensing Committee, who have received appropriate training in respect of the functions under the Scrap Metal Dealers Act 2013, appointed on a rotation basis (excluding the Chair).

6.4To appoint a Chair of the Licensing Sub Committee.

6.5To approve the appointment of all Members of the Licensing Committee as substitute Members of the Licensing Sub Committee subject to Members receiving appropriate training in respect of the functions under the Scrap Metal Dealers Act2013.

6.6That the terms of reference of the Licensing Sub Committee be as follows:

“To have delegated powers to exercise the functions of the Council to consider, hear and decide upon applications, renewals, variations and revocations of licences under the Scrap Metal Dealers Act 2013”.

6.7To delegate the functions set out in Appendix 1 to this Report where indicated toeither the Licensing Sub Committee or the Director of Neighbourhoods and Communities and Assistant Director of Development and Planning Services or any successor role or officer appointed to perform the functions thereof.

6.8That the delegation of such functions does not preclude the Licensing Committeeor Licensing Sub Committee from discharging the functions themselves.

6.9To approve the procedure for the conduct of the Licensing Sub Committee annexed at Appendix 2 to this Report.

6.10That the Licensing Committee receives six monthly reports detailing all licences approved, refused, varied and revoked together with the outcome of any appealsmade under the Act.

6.11To set the fee as detailed in paragraph 5.4 above and to delegate the power to review and set new fees under Section 5 and Paragraph 6 of Schedule 1 of the Scrap Metal Dealers Act 2013 to the Director of Neighbourhoods and Communities and Assistant Director of Development and Planning Servicesor any successor role or officer appointed toperform the functions thereof.

Contact Officer:T Hodgkinson

Tel. 728720