Business in Sport and Leisure (BISL) has welcomed a DCMS-commissioned report that recommends local authorities and central government should pay for a £97m funding shortfall brought about by the new alcohol and entertainment licensing system.

The Independent Licensing Fees Review panel, chaired by Sir Les Elton, also suggested a 7 per cent increase in licensing fees.

BISL chief executive, Brigid Simmonds, said: “We believe that a 7 per cent increase in licence fees for the next three years represents a reasonable settlement moving forward and are delighted that Sir Elton has recommended that central government and local authorities should meet excess costs of transition, rather than the industry.”

The panel estimates that there will be a shortfall – created by the introduction of the new act – during the first three years and central government should pay £43m while local authorities should pay £54m.

The report also made other suggestions to streamline the licensing process, including recommendations that all local authorities should accept electronic applications; that the forms themselves should be simplified and that premises where the sale of alcohol is incidental – such as flower shops and bookshops selling communion wine – should be exempt.

Licensing minister Shaun Woodward said: “I am pleased that the panel thinks the fees model is broadly right. As the report acknowledges, setting the fees is a complex task. We based our original estimates on the best information available at the time, but always accepted that fees might have to change in light of actual experience.

“We will fully consider all the recommendations in the report and publish a response shortly. Once we have reached a decision, we will undertake a full public consultation before making any changes, so licensees, local authorities and the public can have their say.” Details: www.culture.gov.uk