Coronavirus - planning and licensing reform; a lifeline for the UK restaurant industry

13 August 2020 | Applicable law: England and Wales

The British Government guidance announced on 25 June 2020 aimed to allow more pubs, cafes and restaurants to be able to serve customers outdoors by simplifying the process and reducing the cost of obtaining a pavement seating licence. The Business and Planning Bill which enacts this guidance was passed on 22 July 2020 enshrining the new regime into law - prompting a deluge of applications as businesses seek to take advantage of the streamlined procedure in order to capture some of the summer trade.

Under the Highways Act 1980 any business that wants to use pavement space outside their premises to serve customers must obtain a licence from their local authority. Previously the process of licencing varied between local authorities and the costs of obtaining a licence could run into the thousands. The new rules make the process of obtaining a licence quicker and cheaper by capping the maximum fee that authorities can impose at £100 and reducing the consultation period which applications are subject to from a minimum of 28 days to a maximum of 5 working days from submission. Any applications which have not been determined within 5 working days of expiry of the consultation period will be automatically deemed to have been approved meaning more businesses will be able to take advantage of vital trade that the good weather will bring about.

Businesses that obtain a pavement seating licence under the new regime will not need to obtain planning permission in addition.

Businesses should check their insurance policies to ensure that they have adequate coverage for al fresco operations, in particular where this is something that is new for the business.

The Business and Planning Bill also enables more licensed premises, such as pubs, restaurants and bars, to sell alcohol for consumption off the premises through off sales and also home delivery without having to apply for a variation to the conditions of their licence.

Shrewd tenants who pay a rent based on turnover should review their leases to confirm how receipts generated from sales of food and drink consumed off the premises (either in the form of take away sales, or as a result of additional outdoor seating) are treated. Tenants should not automatically assume that these receipts will be treated in the same way as sales food and drink generated and consumed on the premises and occupiers should not rely on landlords to get this right.

This will all come as a welcome relief for the industry and will provide an additional boost for revenues which have been catastrophically impacted by the effects of covid-19.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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