Guidance

Mobile homes: a guide for local authorities on setting fees for the fit and proper person test

Published 4 June 2021

Applies to England

Introduction

1. The Mobile Homes (Requirement for Manager of Site to be Fit and Proper Person) (England) Regulations 2020 (“the Regulations”) prohibit the operation of relevant protected sites in England unless the site owner or a person appointed to manage the site satisfies the relevant local authority that they are a fit and proper person to manage the site. (The term “Site owner” is used in place of “occupier” for ease of reference. An occupier is defined in section 1(3) of the Caravan Sites and Control of Development Act 1960).

2. The provision for the local authority administered fit and proper person test set out in the Regulations includes:

• Powers for local authorities to charge fees in respect of applications to be included in a register of fit and proper persons and to require additional payments by annual fee if an application is granted subject to such a condition.

• Powers to appoint a person to manage a site with the site owner’s consent and recover costs they incur, or which will be incurred, in appointing a person to manage a site.

• Powers to attach conditions to an entry on a register. The conditions may include those that require additional payments to be made to the local authority by way of annual fee.

• It is for the local authority to fix application fees and decide the amount and frequency of any additional payments that may be required by way of annual fee if an application is granted subject to a condition requiring the payment of an annual fee.

• The authority must prepare and publish a fees policy before they can charge a fee. An authority may revise their fees policy and, where they do so, they must publish the revised fee policy.

• When fixing the application fee and deciding the amount and frequency of any additional payments that may be required by way of annual fee as a condition of registration the local authority:

(a) must act in accordance with their published fees policy;

(b) may fix different fees for different cases or descriptions of case; and

(c) may determine that no fee is required to be paid in certain cases or descriptions of case.

3. This non-statutory guidance sets out advice on matters that can and cannot be taken into account in setting fees and how fees are to be calculated.

Section A: Fee policy

4. A local authority can decide whether or not to charge fees for their fit and proper functions in relation to the operation of relevant protected sites. It is also at the local authority’s discretion whether they charge for all or any aspect of their functions under the Regulations. In reaching its decision the local authority may take into account:

• The council’s existing policy towards charging generally – if a council tends not to charge, they will have to justify charging in this case and re-evaluate charging for other licensable premises/ activities.

• Where the council charges, residents may expect that they will get a better service over and above what they currently receive (assuming the site owner passes on the fees which they are charged). Residents’ expectations need to be managed as dealing with non fit and proper person complaints will not be funded through the fee structure.

• Charging will provide a revenue stream to fund the council’s functions related to the fit and proper person test.

5. Both the level of fees and how they are charged are, subject to legal restrictions, at the discretion of the local authority. Fees should be fair and transparent so that anyone required to pay a fee can know what they will be or are being charged for. Fees should also only cover the costs (or part of the costs) incurred by a local authority in carrying out their functions under the Regulations.

6. If an authority decides to charge fees, they must prepare and publish a fees policy before charging any fee in relation to an application for entry or imposing a condition on registration requiring the payment of an annual fee.

7. If a local authority revises its fees policy, they must publish the revised policy and act in accordance with that policy.

8. There is no requirement to consult with site owners or homeowners on setting fees but a local authority may do so.

9. The fee policy should set out:

• the fees payable for applications for an entry on the register
• any additional payments that may be required by way of annual fee as a condition of registration and their frequency
• the matters and appropriate costs taken into account in setting each type of fee
• the method of apportionment of those costs in setting those fees
• such other matters as the local authority considers to be relevant

Section B: Paying fees

10. A local authority is not required to consider an application for entry on the register unless that application is accompanied by the correct fee. If the correct fee is not included, the application will not be valid.

11. If a local authority decides not to approve an application the applicant will not be entitled to a refund of the fee paid.

12. Where the local authority decides to require the payment of an annual fee as a condition of registration, the condition should state the amount and frequency of any additional payments by way of annual fee.

Section C: Costs that can be included in application fees

13. Many applications will be able to be processed quickly with straightforward enquiries. Others may involve complicated issues which require extensive resources to investigate. We would anticipate a flat rate fee for consideration of all applications based on the average complexity of a case.

14. The overriding consideration is that fees set by the local authority must be reasonable and transparent and there must be consistency in the fee structure and its application. The fee structure must be published in the fee policy.

15. The following may assist a local authority in determining what matters it can have regard to in setting application fees under its policy.

Applications for inclusion in a fit and proper register

16. It is recommended that a local authority take into account the following matters on which costs are incurred (or likely to be incurred) (by whichever department, including costs incurred by contracting out) when determining its fee policy for consideration of applications for entry on a fit and proper register:

(a) Initial enquiries;

(b) letter writing/ telephone calls etc to make appointments and requesting any documents or other information from the site owner or from any third party in connection with the application process;

(c) sending out forms;

(d) updating files/ computer systems and websites;

(e) processing the application fee;

(f) land registry searches;

(g) time for reviewing necessary documents and certificates;

(h) preparing preliminary and final decision notices;

(i) review by manager or lawyers of applications, representations made by applicants or responses from third parties;

(j) updating the public register;

(k) carrying out any risk assessment process considered necessary;

(l) reviews of decisions or in defending appeals.

17. In addition, a local authority will need to make such inquiries as are necessary in connection with the application, such as those relating to the relevant person’s ability to secure the proper management of the site.

18. All time taken in establishing the information required to make an informed decision may be included in the application fee, whether or not the entry on the register is granted.

19. Where an applicant contacts the local authority before making an application to ascertain the likelihood of the success of that application, the authority is expected to give such informal advice, including on likely conditions that may be attached to an entry, so the applicant can make an informed judgement on how to proceed with the application.

20. The local authority cannot charge separately for its advice or work in advance of receipt of the application. However, it can build into its fee structure for such applications the costs (or likely costs) it incurs as a result of such pre-application advice, including where no formal application is subsequently submitted.

Section D: Setting an annual fee

21. In setting the level of any annual fee which may be imposed by way of condition, local authorities may take into account the following matters on which costs are incurred (by whichever department, including costs incurred by contracting out):

(a) letter writing/ telephone calls etc to make appointments and requesting any documents or other information from the site owner or from any third party in connection with the fit and proper process;

(b) handling enquiries and complaints;

(c) updating files/ computer systems and website if appropriate;

(d) processing the annual fee;

(e) time for reviewing necessary documents and certificates;

(f) review any representations from an applicant or third parties, including reviews carried out by manager or lawyers

(g) carrying out risk assessment where considered necessary

(h) time spent on consulting the site owner and third parties

(i) time spent on meetings/discussions and in giving informal advice and assistance to site owners

(j) monitoring and enforcement of fit and proper person requirements

Site visits: Officer and travel time

22. Officer time can be considered as it may be necessary to visit a site to ascertain whether or not the condition(s) subject to which a fit and proper person application has been granted has been met. Travel time to and from the site, including fuel costs can also be taken into account and could be calculated using a single value for travel costs to apply to all sites.

Annual fees: Options

23. In assessing annual fees an authority will need to take account of their overall costs in respect of their fit and proper functions. There are a number of different options available in setting an annual fee structure, such as banding by number of conditions attached to an entry or the number of pitches on a site. Individual sites or persons must not however be targeted for example because they require greater monitoring.

24. The purpose of the fit and proper person test is to assess whether the site licence holder or the appointed manager is a fit and proper person to manage the site. The assessment will therefore be related to the individual and their ability to manage the site. Care should be taken in determining fees to distinguish costs that specifically relate to the requirements under the Regulations and wider costs relating to site licensing. Local authorities are able to charge annual site licence fees in relation to the site under their existing site licensing powers in Part 1 of the 1960 Act.

25. Option 1 – To levy a charge based on the number of pitches on a site. A fee per site could be based on the cost to the local authority of carrying out its fit and proper function for all sites (excluding any application fee costs), divided by the total number of pitches on all sites. The fee for a particular site would then depend on the number of pitches that site has. This will ensure that small sites are not disproportionately affected.

26. Option 2 – A fee based on the basic cost of monitoring its fit and proper function (excluding any application fee costs) plus a cost based on the number of conditions attached to an entry on the register. This method recognises that having more conditions attached to an entry is likely to take up more time in terms of monitoring. A condition that relates to the payment of an annual fee should be disregarded for this purpose.

Table 1

Number of conditions	Annual fee
0
1
2
3+

Section E: Factors that cannot be included in fees

27. Any charges must be limited to recovering the costs of exercising their fit and proper test function as it relates to the operation of relevant protected sites. A local authority cannot take into account when setting fees, costs incurred in exercising any of their other functions under the Caravan Sites and Control of Development Act 1960 or costs that have already been charged for by other service areas.

28. No fees can be charged for holiday or other non permanent residential sites. Sites which are in mixed use i.e. partly holiday with some permanent Mobile Homes Act protected residential pitches, fall within the definition of relevant protected site and fees can, therefore, be charged for such sites. Equally functions relating to such sites can be taken into account in setting fees.

Section F: Exempting certain types of site

29. Under the Regulations a local authority has power to determine that no fee is required to be paid in certain cases or descriptions of case.

30. A local authority must however be able to justify any such decisions.

31. Any exemption(s) must be rational, objective and consistent and set out in the fee policy. Sites that are exempted from paying fees can subsequently be brought within the charging structure by a change to the fee policy.

32. A local authority should not charge higher fees for non-exempted sites to cover its costs in relation to their fit and proper person functions for those sites that are exempted from payment.

Section G: Surpluses and deficits

33. A local authority must not make a profit and can only pass on to the site owner their costs incurred in carrying out the fit and proper function. Equally, a local authority is not expected to make a loss in carrying out its fit and proper functions. Overall, the fit and proper test can be a self-financing function which local taxpayers are not required to subsidise.

34. We would recommend as best practice, that each year the local authority assesses their previous costs to determine if they were accurate. Where there is a deficit of expenditure the excess monies need to be reflected in the fee charged to the site owner in the next year.

35. So, for year 2, the fee to the site owner will be the licence fee for year 2 minus the money not spent from year 1.

Example 1: the fee for 2020 was £500; a review at March 2021 shows LA cost of licensing for 2020-21is actually £350. The LA anticipates that the costs for 2021-22 will be £400. So, for the next licensing period 2021-22 the fee to the site owner is £400 - £150 = £250

Example 2: licence fee for 2020 was £500; a review at March 2021 shows LA cost of licensing for 2020-21 is actually £550. The LA anticipates that the costs for 2021-22 will be £550. So, for the next licensing period 2021-22 the fee to the site owner is £550 + £50 = £600.

36. The above examples are not exhaustive. The authority can take account of any relevant increases or decreases in costs since the last fee was set but must bear in mind that the changes are to the totality of the relevant costs. Fees should not vary on an individual case by case basis, even if for example, the increase in cost of site visits is due to activity on one site.

Section H: Amending conditions attached to an entry on a register

37. A local authority may alter the conditions attached to an entry on a register (by adding new conditions or changing or deleting existing ones), following a review. A review may only take place if new evidence relevant to the person’s inclusion in the register becomes available. New evidence could come from the local authority’s monitoring activities, from the site owner or manager or from a third party.

38. Should the local authority be minded to add or change conditions, it must notify the site owner of its interim decision (except in the case where it is deleting a condition) and consider any representations made by the site owner, before reaching a final decision. If the site owner is unhappy with the decision to add or change conditions, they will have a right of appeal to the Tribunal.

39. Any costs involved with amending existing conditions or adding new conditions to an entry may be factored into the cost of calculating any annual fee.

Section I: Charges for appointing a person to manage a site

40. Where a local authority, with the site owner’s consent, has appointed a person to manage a site, the local authority can recover from the site owner costs they incurred or to be incurred, in making the appointment. The costs must however be reasonable.

41. Costs that can be recovered will depend on the agreement made between the local authority and the site owner. Before entering into any discussions or agreements relating to the appointment of the manager, local authorities should seek relevant advice from their legal officers.