Rehman (On Behalf of the Wakefield District Hackney Carriage And Private Hire Association), R (On the Application Of) v The Local Government Association

A licensing authority must allocate costs to the licence category to which they relate. Under section 70 of the Local Government (Miscellaneous Provisions) Act 1976, vehicle-licence fees cannot include costs of monitoring and enforcing drivers’ conduct. The provision concerns council control and supervision of vehicles, within a distinct vehicle-licensing regime. Under section 53(2), costs of monitoring and enforcing licensed drivers may be recovered as administration costs through driver-licence fees, including post-grant compliance and suspension or revocation costs. Resource constraints and a desire for self-funding cannot alter the statutory meaning. There is no general principle requiring licensing schemes to be self-funding.

The respondent, acting for the Wakefield District Hackney Carriage and Private Hire Association, challenged the Council’s resolution fixing fees for vehicle, driver and operator licences. The High Court allowed the judicial review claim, declared that specified driver misconduct activities could not lawfully be charged under section 70 of the Local Government (Miscellaneous Provisions) Act 1976, and quashed the resolution: [2018] EWHC 3664 (Admin).

The Council appealed. It argued that driver-enforcement costs were recoverable through vehicle-licence fees under section 70 or driver-licence fees under section 53, and that the licensing scheme should be self-financing. The central issue was the proper statutory allocation of those costs.

The appeal was dismissed.

1. Part II of the Local Government (Miscellaneous Provisions) Act 1976 establishes distinct and comprehensive regimes for vehicle, driver and operator licences. Each regime addresses grant, conditions, suspension, revocation and fees. The statutory structure contains no cross-reference permitting the fee for one type of licence to recover costs attributable to another.

2. The words concerning the control and supervision of taxis and private-hire vehicles in section 70(1)(c) refer to control and supervision by the council. They cannot be given the strained meaning that monitoring and enforcing drivers’ conduct amounts to control of the vehicle for the purpose of charging a vehicle-licence fee. Public-safety considerations, limited local-authority resources and the desirability of a self-funding scheme cannot change that construction.

3. Conversely, the costs of monitoring and enforcing licensed drivers’ behaviour fall within the costs of issue and administration under section 53(2). Administration naturally extends beyond the initial grant and includes monitoring compliance with continuing requirements and conditions, together with suspension and revocation. Those costs may therefore be recovered through the driver’s licence fee.

4. R v Westminster City Council ex p Hutton [1985] 83 LGR 461, Liverpool City Council v Kelly [2003] EWCA Civ 197, and R (Hemming (trading as Simply Pleasure Ltd)) v Westminster City Council [2015] UKSC 25; [2017] UKSC 50 did not establish a general self-funding principle. They concerned different statutory schemes or different issues. The prohibition on cross-subsidy between different licences was not challenged on appeal.

The Council’s resolution was therefore unlawful to the extent that the vehicle-licence fees included driver-enforcement costs.

• Court of Appeal (Civil Division) — [2019] EWCA Civ 2166: dismissed the Council’s appeal.
• High Court of Justice, Queen’s Bench Division, Administrative Court — [2018] EWHC 3664 (Admin): allowed the judicial review claim, declared that specified driver misconduct costs could not lawfully be charged under section 70, and quashed the Council’s resolution.