Councillor slams selective licensing scheme and warns of landlord exodus
10 months ago | 3 comments
Councils must not profit from selective licensing schemes claims Matthew Pennycook
12:01 AM, 21st July 2025, 9 months ago
12
The Housing Minister has confirmed councils should not profit from selective licensing fees, despite a council landing itself in hot water over mishandling of fees.
Matthew Pennycook has warned councils “not to use selective licensing fees to fund other local authority services,” emphasising that fees must be ringfenced for running the schemes alone.
However, a previous report by Property118, reveals Nottingham City Council spent millions of pounds on selective licensing and failed to ringfence the scheme.
Local authorities are not expected to profit from licensing
In a written question to the Ministry of Housing, Communities and Local Government, Shadow Housing Secretary Kevin Hollinrake asked: “Whether revenues from selective licensing charges on private rented sector landlords (a) are ringfenced and (b) can be applied to the general revenue account; and whether councils can charge above cost recovery.”
In response, Mr Pennycook confirmed councils should not profit from selective licensing fees.
He said: “Selective licensing fees paid by landlords to local authorities should only be used to cover the costs of running schemes.
“Local authorities are not expected to profit from licensing, nor should they use licensing revenues to fund other local authority services.”
Nottingham City Council failed to ringfence selective licensing fees for years
Despite Mr Pennycook’s warning, Nottingham City Council had failed to properly ringfence selective licensing fees for years, and only began doing so in 2024.
Previously, Property118 reported, the council published a report by accounting firm Ernst and Young (EY) who accused the council of “inappropriate financial activity”.
The damning report revealed selective licensing fees were only properly ringfenced in 2024.
The report revealed one of the main sources of licensing income for the council is selective licensing.
According to its annual expenditure report, the council spent a whopping £4.2 million on selective licensing between 2020/1 and another £2.8 million in 2021/22.
The council in a statement claimed the report: “It is important to be clear there is nothing specifically identified within the samples tested in the assessment that suggests any allocated funds have been misspent or funding has not been used for its overall intended purpose.
“The council has been open about the nature and seriousness of the assessment’s findings.”
Tags:
Matthew Pennycook, Nottingham City Council licensing, ringfencing landlord fees, Selective Licensing, selective licensing fees
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Unintended benefit of removing s21?
Member Since May 2015 - Comments: 2197 - Articles: 2
9:48 AM, 21st July 2025, About 9 months ago
Is this the same Matthew Pennycook who can see no evidence of landlords leaving the sector?
Member Since November 2017 - Comments: 263
10:06 AM, 21st July 2025, About 9 months ago
And just who decides if the charges reflect the cost incurred by the council?
Cost £750 for 5 years, number of inspections in that time 2, length of inspection time 30 mins, time to write up 15 mins, travel time 15 mins. So 2 hours work in 5 years at £375 an hour. (please assume a lot of disparaging rude words here).
Member Since September 2015 - Comments: 1013
10:16 AM, 21st July 2025, About 9 months ago
I bet a lot of Councils use creative accounting techniques to move money around.
Member Since May 2014 - Comments: 147
11:35 AM, 21st July 2025, About 9 months ago
err..this money-making scheme has been in existence for some years Mr Pennycook, why chirp up about it now? Clearly you see it as a political isue that you can score points with..typical opportunist MP, just pathetic.
Member Since November 2019 - Comments: 154
11:38 AM, 21st July 2025, About 9 months ago
He lives in Dream Land,
The whole point of Selective Licence , was to raise money for the Council. The original legislation was bought in some years to solves problem areas max 10% without authorisation .
It worked well until the Government told the Councils they could keep the money .
And if any Council requires whole are Licensing should they not resign due to their failure.
Member Since August 2016 - Comments: 508
1:01 PM, 21st July 2025, About 9 months ago
Reply to the comment left by Tim Rogers at 21/07/2025 – 10:06
That’s the hourly rate you would expect a senior solicitor/partner to charge in, say Brighton, for proper professional work, not some LA scrivener pushing a pen over a table without much thought or purpose?
Grandiose words but there’s no way any Govt Minister can police this, without costing more than anything ‘saved’?
Member Since May 2017 - Comments: 765
1:17 PM, 21st July 2025, About 9 months ago
Perhaps the tenants should be asked how they’d like their money spent?
Member Since September 2018 - Comments: 3515 - Articles: 5
4:42 PM, 21st July 2025, About 9 months ago
Reply to the comment left by JB at 21/07/2025 – 13:17
agree.
I am tempted to do a FOI in one council and then tell my tenants (who have had their rent increased to include the additional £11 per months for the licence over the 5 years) just where THEIR money is being spent exactly….copying in the local MP too…
Member Since September 2024 - Comments: 95
5:32 PM, 21st July 2025, About 9 months ago
The Councils should just take the money direct from the Tenants. After all, it the Tenant who’s paying!
Member Since May 2014 - Comments: 89
6:05 PM, 21st July 2025, About 9 months ago
May not be true, but I heard of one council transferring employees on long term sick into the selective licensing department. Thereby using up the income “legitimately” 🤷🏻♂️