The critical comment was made during the hearing of a rent repayment order (RRO) application relating to a PRS tenancy in Nottingham which has a city wide selective licensing scheme.

The tenanted property should have been licensed under Nottingham's previous city wide scheme - which had been granted approval by the Secretary of State (at DLUHC) in early 2018. Rather than the tribunal's RRO decision itself though, and the reasoning behind it, it appears to be the comment (which does not appear to be part of the legal decision of the tribunal) criticising councils that has caused some ripples in Nottingham, raising smiles of vindication amongst some landlords and eyebrows amongst some council officers.

The possible total of the RRO in this case was £12,909, a figure reduced initially by 40% by the tribunal to £7,745. The tribunal gave its reasons, in the specific circumstances of the case, for this reduction and then went further to set the total deduction from the maximum at 90% - the further 50% reduction being due to the financial circumstances of the landlord who did "not have access to large cash reserves". This meant that the final RRO was set at £774 with the £300 cost of the tenant's application also being ordered to be paid by the landlord.

However, squeezed in amongst the sections laying out the reasoning for the deductions came the following comment "We are also concerned that Nottingham City Council appears to have imposed a selective licensing regime over a substantial part of its area rather than targeting particular areas where problems of poor housing, anti-social behaviour etc. are found. We are concerned that local authorities adopting this approach may be tempted to regard the licensing regulations as being a regular source of income rather than dealing with the issues for which they were intended".

There appears to be no hint in the case transcript, beyond the finding that this particular landlord was not regarded as a "rogue" landlord, at what prompted what some might see as a slightly off topic intervention by the tribunal on the whys and wherefores of council's making certain types of licensing designation rather than others. Nottingham Council wasn't a party to the RRO application and so wasn't present at the hearing in order to provide any justification or clarification to the tribunal as to why it chose to make a city wide designation. Such justification is, however, provided in the proposal documents and committee reports the council produced (and which can be found on its web pages) leading up to approval of such a designation added to which, it was then signed off by the Secretary of State - as is the case with all licensing proposals above 20% of the borough area or above 20% of the total PRS stock in the borough. No evidence was introduced at the RRO hearing - judging by the transcript - to back up any concerns that there is wide-scale, if any, abuse by local authorities of the licensing regulations in order to create an extra income stream for a local authority via setting up a large selective licensing scheme.

A council spokesperson is quoted on the Property118 website as saying "We were surprised to see these comments made at this tribunal, given that the rules around selective licensing schemes are clear and long-standing. Firstly, we had to make an evidence-driven case to Government which was firmly based on legislation and guidance ..... Secondly, selective licensing is not income generating - councils are not permitted to make a profit. Licence fees solely cover the costs of setting up, operating and delivering the scheme in the city".

A local landlord, on the other hand, is quoted as saying "The RRO Tribunal said Nottingham Council is seen as money making because its selective licensing scheme covers the whole city and not the deprived areas .... The council will not listen but the tribunal has seen Nottingham's selective licensing scheme for what it is". Meanwhile, the headline on another property website that reported on the case says "Tribunal slams councils for 'cash cow' licensing schemes that aren't needed".

The waters of the selective licensing debate appear to have been muddied.

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