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:
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:
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.
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.
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:
Find out what questions ASSC members have asked about the proposals: STL Questions compilation
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.
To ask the Scottish Government for what reason its short-term let consultation document makes no reference to the impact of COVID-19 pandemic on the tourism sector. Current Status: Expected Answer date 27/10/2020
To ask the Scottish Government for what reason its short-term let consultation will be live for four weeks and not the standard 12, and what its position is on whether this timescale will allow stakeholders to properly engage with the process. Current Status: Expected Answer date 27/10/2020
To ask the Scottish Government whether it has considered piloting its proposed short-term let regulations before implementation. Current Status: Expected Answer date 27/10/2020
To ask the Scottish Government whether it will publish a business regulatory impact assessment to accompany its plans to introduce short-term let licensing and planning control areas. Current Status: Expected Answer date 27/10/2020
To ask the Scottish Government, in light of its Programme for Government advising that plans for the Transient Visitor Levy have been put on hold due to COVID-19, and that “future consideration of the levy will take account of the changed context the industry is operating in”, for what reason a similar approach was not extended to its proposals on short-term let regulation. Current Status: Expected Answer date 27/10/2020
S5W-34474: Oliver Mundell, Dumfriesshire, Scottish Conservative and Unionist Party, Date Lodged: 11/01/2021
To ask the Scottish Government how its proposed short-term let regulations in response to the COVID-19 pandemic will impact on bed and breakfast businesses, and what consultation there has been with the sector.
Current Status: Expected Answer date 25/01/2021
S5W-34588: Finlay Carson, Galloway and West Dumfries, Scottish Conservative and Unionist Party, Date Lodged: 14/01/2021
To ask the Scottish Government what (a) bills, (b) regulations and (c) consultations it has postponed since March 2020 due to the impact of COVID-19, broken down by portfolio area.
Current Status: Expected Answer date 28/01/2021
S5W-34589: Finlay Carson, Galloway and West Dumfries, Scottish Conservative and Unionist Party, Date Lodged: 14/01/2021
To ask the Scottish Government, in light of the responses from local authority stakeholders to the consultation on short-term lets, whether it will provide grants or loans to councils to assist with the costs of setting up a licensing scheme, and how many have (a) requested and (b) indicated that they might require additional funding.
Current Status: Expected Answer date 28/01/2021
Andy Wightman (Lothian) (Scottish Green Party): To ask the Scottish Government, further to the comment by the Minister for Local Government, Housing and Planning on 8 January 2020 that “we will review the tax treatment of short-term lets to ensure that they make an appropriate contribution to the communities that they operate in” (Official Report, c.37), what progress has been made with this review, and when the results will be published. (S5W-31815)
Kevin Stewart: Due to the impact of the COVID-19 pandemic, we prioritised preparing the statutory instruments for the licensing scheme and short-term let control areas so that they can be considered by the Scottish Parliament in this session and deferred the review of the tax treatment of short-term lets. We are now considering how to complete the review in light of the evolving COVID-19 situation.