Part 3: Resources and systems supporting District Licensing Agencies

Liquor licensing by territorial authorities.

3.1
In this Part, we discuss the resources and systems supporting DLAs in carrying out their liquor licensing functions. We comment on:

  • working relationships with the Police and public health services;
  • the information systems used by DLAs;
  • staffing arrangements within DLAs;
  • the role of the inspector; and
  • how DLAs report on their performance.

Main findings

3.2
Working relationships between most DLAs and their regulatory partners were close, with DLAs responsive to the needs of the Police and public health services. However, situations had arisen where differences in expectations, priorities, and available resources had highlighted the need for a collaborative arrangement - such as a protocol - recording an agreed approach to processing applications and sharing information. In our view, a protocol would have several benefits, including recording a joint commitment to common goals, developing an understanding of respective roles, and establishing the means to pool collective resources. At a district level, the need to work effectively together may require DLAs to design their licensing processes to reflect the needs and demands of the Police and public health services.

3.3
All DLAs had information systems supporting their liquor licensing activities, enabling them to track and process applications, issue licences and certificates, and retrieve historical licence information. Some systems were used to also store compliance records and schedule monitoring activity.

3.4
Staffing arrangements varied in the DLAs we visited, and in every territorial authority the nature and extent of liquor licensing work was different. We were not satisfied that the allocation of territorial authority staff time was appropriate to the range of tasks associated with the scope of the liquor licensing function. Territorial authorities need to carry out a more informed assessment of the range of activities that staff should perform as part of their DLA tasks.

3.5
The statutory functions of the inspector and the Secretary of the DLA were not supported by policies and practices to adequately ensure appropriate independence and impartiality. Policies and practices should be in place to enable DLA staff to carry out their duties in the manner intended by the Act, and to manage situations that place them in a potential conflict of interest.

3.6
Performance reporting focused on activity levels rather than on trends in compliance. Measures of compliance and contribution to community outcomes can be used to review the effectiveness of liquor licensing policies and practices, and will require territorial authorities to identify and analyse relevant data from a number of sources, working closely with the Police and public health services.

Working relationships with the Police and public health services

3.7
Responsibility for considering applications and issuing licences and certificates rests with each DLA. However, the Act requires each DLA to consult the Police and, for specified licence applications, the Medical Officer of Health (supported by staff in the local public health service). DLAs, the Police, and the public health services have common interests in promoting practices consistent with the Act’s aim to reduce alcohol-related harm. The consultation requirements under the Act, and common interests in working towards reducing alcohol-related harm, require the DLAs, the Police, and the public health services to work effectively together.

3.8
The Act recognises that the Police and the Medical Officer of Health have an important part to play in assessing the suitability of people seeking to hold a liquor licence or manager’s certificate. The DLA must forward applications to both of the other agencies (in the case of the Medical Officer of Health, only applications for new or renewed on-licences and club licences). Each may oppose an application (as may the inspector). If an application is opposed, it must be forwarded to the Authority. The Police - and to a limited extent the Medical Officer of Health - also have enforcement powers under the Act.

3.9
We asked staff at DLAs about their relationships with the Police and public health services staff. We also met a number of Police and public health services staff, whose views we sought on:

  • DLA consultation as required by the Act, and consultation about individual applications;
  • role definition;
  • information sharing; and
  • collaboration in monitoring compliance.

3.10
We also asked the other two agencies whether they had recorded the way they would work together with the DLA and, if so, how they had recorded that information.

Processing applications and sharing information

3.11
The 12 DLAs we visited were, on the whole, working well with the Police and public health services. Communication was generally good, and the DLA was responsive to any requests or concerns associated with particular applications. These concerns might be about a particular aspect of an applicant’s proposal. One of the other agencies might ask the DLA to apply conditions to a licence or defer issuing a licence or certificate until additional supporting information had been supplied to them (such as the licensee’s host responsibility policy or references for an applicant seeking a manager’s certificate).

3.12
However, the other agencies had different expectations in some cases about their involvement, and unresolved issues about their processes (including what information they would share and how they would share it).

3.13
Police and public health services staff told us that they were referred all applications required by the Act. However, in some cases documentation forwarded by the DLA was incomplete, requiring the Police or public health services staff to seek additional information.

3.14
To perform their functions under the Act, and to carry out their wider responsibilities, the Police and public health services need certain information about an application. Some Police and public health services staff referred to particular documentation they were not receiving from the DLA. This included verification of the identity of applicants for manager’s certificates, menus, host responsibility plans, copies of licences, and lists of duty managers. The Police and public health services staff referred to copies of licences and lists of duty managers when they visited licensed premises.

3.15
There were significant variations in the amount of time DLA, Police, and public health services staff were able to assign to liquor licensing work. For example, at some Police stations we were told that their liquor licensing work was well resourced. At others, staff had limited time for liquor licensing, and it was difficult to process applications when staff were on other duties. This can be difficult for public health services staff too.

3.16
In our view, DLAs and their regulatory partners could explore ways to align their processes to their respective needs and capabilities. At one interview, for example, public health services staff noted that regular information about when liquor licences were about to expire would help them schedule their own inspection visits more efficiently. This information could also help the Police.

3.17
The Police in one district used DLA records of current duty managers to check for any new offences that might have a bearing on the duty manager’s suitability for the role. Where appropriate, the Police would notify the DLA of the offence. This arrangement was a useful way for the Police and the DLA to monitor the ongoing suitability of duty managers.

3.18
The practice at one DLA of assigning a risk grading to applications for special licences was useful to the Police, guiding them on how best to focus their efforts.

3.19
Processing special licences can be a source of tension between the DLAs and the Police. Applications for special licences were sometimes submitted at short notice, but still required thorough investigation and reporting by the Police. For larger public events, the Police and public health services might need time to consider risks and discuss planning for the event with the organisers. A short timetable creates a potential conflict between the desire of the DLA to meet the needs of an applicant by issuing the licence without delay, and the pressure on the Police to carry out necessary inquiries at short notice and be satisfied with the adequacy of arrangements for managing the provision of liquor at the proposed event. In our view, DLAs need to come to an arrangement with the Police for handling these situations.

3.20
The Police (and to a lesser extent public health services staff ) sometimes had large numbers of applications to process within the statutory 15-working-day period. This work could be time consuming, particularly when there were few staff available to do it and where some investigation was required. Applications for manager’s certificates and special licences were largely responsible for the workload facing the Police.

3.21
In some districts, DLAs did not always receive reports on applications from the Police and public health services, or received the reports late. While the Act allows DLAs to issue liquor licences or manager’s certificates without this reporting, this is undesirable. The intent of the Act is clearly that applications undergo scrutiny by all three regulatory agencies, and such reporting is an important source of assurance for the DLA. In circumstances where this might be difficult to achieve (normally because of limited resources), DLAs need to design their processes, as far as possible, to enable the Police and public health services to carry out their inquiry and reporting functions as envisaged by the Act.

Collaborative arrangements

3.22
In our view, a collaborative approach to regulation offers significant benefits in promoting compliance and bringing about more successful outcomes. This view was confirmed by comments made to us about the perceived benefits of joint monitoring:

  • Consistent messages can be sent to licensees and managers of licensed premises.
  • Expertise, resources, and powers can be best used (broader view of compliance, greater monitoring capacity, use of different statutory powers).
  • Intelligence can be shared.
  • Evidence can be verified and corroborated.
  • The three agencies can show a common commitment.
  • Views presented to the Authority can be co-ordinated.
  • Collaborative arrangements can be formally recognised by senior management, establishing a framework for ongoing, systematic, and shared resourcing.

3.23
We asked DLAs whether they had protocols or other documented working arrangements with the Police and public health services. Such arrangements can have significant benefits, such as:

  • recording common goals, and how progress in achieving those goals can be measured;
  • identifying respective roles, setting out how each regulatory agency can contribute to administering the Act;
  • documenting agreed processes for considering applications, collecting and sharing intelligence, monitoring compliance, and pursuing enforcement options;
  • providing a framework for responding to issues as they arise; and
  • establishing agreed expectations about sharing information and resources, making working relationships less dependent on personal relationships.

3.24
In one district, the DLA and the Police had recognised the need to clarify and record their roles, responsibilities, and expectations. They had prepared a draft joint policy that:

  • defined their respective roles;
  • outlined agreed approaches to high-risk premises;
  • specified a requirement for licensees to submit and give effect to host responsibility plans;
  • defined the information that the DLA would forward to the Police; and
  • set out a process for considering applications for manager’s certificates and special licences.

3.25
In another district, the three regulatory agencies had prepared a Memorandum of Agreement some years before, recognising the importance of recording their commitment to the working relationships. The parties noted the benefit of working to an established, agreed arrangement, rather than relying on personal relationships that depended on the commitment of individuals in certain roles at the time.

3.26
In some situations, working relationships were enhanced by physical access to Police, public health services, and DLA premises. In one district, a more formal colocation arrangement was being considered.

3.27
All DLAs could usefully consider the potential benefits of such arrangements, having regard to their own circumstances.

3.28
Committing resources (including additional funding where necessary) and providing strategic leadership are critical to the success of any formal working arrangement. In recognition of the importance of resourcing and leadership, each agency’s senior management should explicitly support and endorse any documented working arrangement.

Information systems used by District Licensing Agencies

3.29
We examined how each DLA recorded:

  • when applications were received and the progress of processing; and
  • the history of licensed premises, including details of licence conditions and licence-related information.

3.30
Effective information systems are a valuable tool for tracking regulatory activity and retrieving relevant information. They should be designed to promote efficient processing, procedural consistency, and statutory compliance. Liquor licensing staff should be able to retrieve relevant data, and management should be able to monitor activity levels and report against relevant measures of performance.

3.31
All DLAs had information systems supporting their activities. Some DLAs recorded in a database when processing tasks were completed, often supplemented by hard copy application cover sheets. One DLA scanned all the documents it received into a database, and used the scanned documents instead of physical documents.

3.32
Some systems provided workflow management tools, helping to ensure that the necessary tasks were followed in sequence, and creating a record of when tasks were completed and by whom. Such systems are helpful for ensuring that processing complies with the requirements of the Act. Electronic templates for letters to applicants, standard licence conditions, public notices, reports, and licences were in use, making processing and administration more efficient.

3.33
DLAs were able to retrieve information about existing licences and certificates from their databases. Some databases contained a history of compliance monitoring, showing a summary of inspections. One useful tool was the facility to automatically schedule inspections at prescribed intervals, based on the record of the last visit.

3.34
Interfaces between liquor licensing and relevant territorial authority property databases (such as those used for recording requests for service, or for issuing resource consents, building approvals, or food hygiene certificates) off er a means to better integrate, and provide central access to, relevant regulatory information about a single property - including licensed premises.

Staffing arrangements within District Licensing Agencies

3.35
The time of territorial authority staff assigned to liquor licensing work, and the way those staff are organised, directly affect the mix of regulatory activities carried out by the DLA. Arrangements that suit one DLA will be inappropriate for another. We observed a variety of arrangements in the 12 DLAs that we visited.

Staff resourcing within District Licensing Agencies

3.36
Comparing staffing was difficult. The roles of staff differed from one DLA to another, and, where liquor licensing was only one of the duties of a territorial authority staff member, the DLA may not have recorded the proportion of that person’s time spent on liquor licensing work. Moreover, some inspectors spent more time on inspections than others, had further to travel to carry out their duties, had more applications to process, had more licensed premises to administer, and were responsible for more high-risk premises that required closer supervision.

3.37
No work had been carried out to compare the time of territorial authority staff assigned to doing liquor licensing work in each DLA. However, data we analysed from DLA annual reports for 2005/06 suggested differences in capability throughout DLAs. This was confirmed by observations during our field visits. In our view, staff resourcing was responsible (to some extent) for the limited scope of liquor licensing activity in some of the DLAs we visited.

3.38
The effect of staffing constraints was, from our observations, most likely to be reflected in difficulties in carrying out high-volume activities (notably interviewing applicants for manager’s certificates), delays in processing applications, less time available for education and training to promote voluntary compliance, and fewer monitoring inspections. These were also the activities identified by inspectors when we asked them what additional work they would carry out if they had more time.

Resource planning within District Licensing Agencies

3.39
In planning the resources needed to perform a regulatory function, territorial authorities need to consider:

  • the purpose of the relevant legislation and the statutory responsibilities of the regulator; and
  • the types and frequency of activities needed to achieve the legislative purpose and give effect to the regulator’s statutory responsibilities.

3.40
Territorial authorities need to assign enough resources to DLA functions to:

  • consider applications and issue licences and certificates as required by the Act;
  • carry out enough monitoring to be reasonably assured that licensed premises are complying with the Act; and
  • carry out other activities, such as training and education, that are consistent with achieving the purpose of the Act.

3.41
We asked team leaders and regulatory managers how they had determined the staff resourcing needed for liquor licensing tasks, and how they were ensuring that their resources were being used in the most effective and efficient way.

3.42
Staff resourcing was generally a result of historical practices. We were shown no systematic assessments of resource needs that referred to the range of tasks associated with administering the Act to a particular level of regulatory assurance, or to any indicators relevant to reducing alcohol-related harm. At best, target activity levels related to numbers of applications processed, numbers of inspections carried out, or timeliness targets.

3.43
It is important that staff time is used most productively, with tasks assigned in the most effective and efficient way. A recognised way to assess this is to require staff to record how they spend their time. With this activity data, managers can identify where staff time can be better spent, and tasks more efficiently deployed.

3.44
Very few staff were recording how they spent their time against a range of categories. One team leader had asked their staff to record their time to determine if the inspector’s time was unnecessarily spent on paperwork, limiting the scope for compliance monitoring. This was a useful approach.

3.45
While some DLA staff spent all their time on liquor licensing work, at other DLAs this was only one part of their job. This reflected the reality that, for some DLAs, there was not enough liquor licensing work to justify a full-time inspector position.

3.46
However, in these circumstances, inspectors found it difficult to give priority to liquor licensing activities - and inspections in particular - in the face of other, competing, demand-driven tasks. Examples of conflicts we observed included:

  • environmental health staff carrying out liquor licensing inspections and checks for food compliance at the same time, which, while efficient, was likely to be at the expense of time spent on liquor licensing matters; and
  • the performance of other regulatory functions that sometimes made urgent demands on the time of the inspector.

3.47
One inspector cited concerns about conflicting task priorities as the reason for their DLA’s decision to retain full-time liquor licensing staff . This arrangement also let staff get to know the legislation more comprehensively, and become more familiar with different aspects of the job.

3.48
Having two or more part-time liquor licensing officers with the warrant of inspector under the Act makes it possible to continue carrying out statutory duties and related tasks when one staff member is absent, and addresses the need for succession planning. Using staff with multiple responsibilities also allows for efficient coverage of large geographical districts. A number of DLAs had assigned warrants to more than one environmental health officer of the territorial authority, sometimes using other environmental health officers to supplement the resources of the inspector. All such additional warranted staff should receive thorough training. This had not always occurred, reducing the contribution they were able to make as inspectors.

3.49
In the absence of evidence that territorial authorities had taken an informed and systematic approach to defining their staffing requirements, we were not confident that DLAs were appropriately resourced. The decision to use full-time or part-time staff has implications for efficiency, and also for the priority assigned to liquor licensing activity. In our view, these decisions should be made only after careful consideration of the factors discussed in paragraphs 3.39-3.48.

The role of the district licensing inspector

3.50
The Act requires the inspector to perform the duties of a statutory officer. Independence and impartiality are critical to the process of inquiry and reporting set out in the Act, and to the exercise of inspectors’ powers of inspection and enforcement. An inspector may oppose an application for a liquor licence, and present evidence when the Authority considers the application.

3.51
The principles of independence and impartiality should be reflected in policies and practices, recognising those circumstances where the recommendation of the inspector may diff er from the views of their managers or of elected members. The policies and practices should also reflect the possibility that the personal life of a district licensing inspector could bring them into situations where there might be a potential conflict of interest with their statutory duties under the Act.

3.52
We did not examine corporate policies on independence or managing conflicts of interest. In our view, statutory duties such as those of the inspector should be governed by specific policies and practices that reflect the particular role and circumstances likely to create a possible perception of bias. We asked DLAs whether the inspector’s role and responsibilities were defined, with clear expectations that:

  • the district licensing inspector would be free to carry out their statutory duties without undue influence; and
  • guidance would be available on managing conflicts of interest associated with the discharge of the statutory duties of the inspector, and processes would exist for recording the nature of any such conflicts.

3.53
Inspectors told us they were able to carry out their statutory duties in an independent manner. However, none of the role definitions we examined referred specifically to the statutory independence associated with the position.

3.54
The private activities of inspectors can present them with possible or real conflicts of interest. We were told of one situation where the independence of the inspector was seen to be compromised by their private involvement in - and presence at - a special event for which the DLA had issued a liquor licence. None of the DLAs referred us to guidance on the management of possible conflicts of interest relevant to the statutory duties of their inspectors.

3.55
We encourage all DLAs to recognise, in defining their roles and responsibilities, the independence of the inspector in performing their duties as a statutory officer. District licensing inspectors should have access to conflict of interest guidance specific to their statutory roles and duties, and processes and mechanisms should be in place for appropriate disclosure and mitigation action where necessary. Such processes and mechanisms could, for example, include establishing a system (such as an interests register) for recording those types of ongoing interests that can commonly cause a conflict of interest, and for updating it regularly. They could also provide avenues for training and advice, and provide a mechanism for handling complaints or breaches of the policy. Such a policy would better protect staff decisions against allegations of bias.

3.56
Each territorial authority has an associated statutory role - that of Secretary of the DLA1 - and it is important that the roles of district licensing inspector and Secretary are separate. The independence of the two roles provides an important check on the statutory processes of inquiry, reporting, and decision-making envisaged by the Act.

Potential benefits of peer review

3.57
In our view, DLAs could benefit from arrangements to have peers review the supporting documentation for licence applications, to ensure that licences are correct and that applications are considered in keeping with statutory requirements. Peer review has other benefits, including ensuring that manuals, procedures, and policies are followed. Arrangements for an inspector’s report to be reviewed by a fellow inspector, or by another colleague, can promote consistency. Few DLAs had peer review arrangements in place.

3.58
DLAs could consider having district licensing inspectors review the practices of their colleagues in other DLAs. This could promote better practice and consistency, with particular benefits for inspectors working on their own.

3.59
DLA staff were in contact with their counterparts in other territorial authorities on day-to-day matters relating to the Act. The New Zealand Institute of Liquor Licensing Inspectors provided a valuable channel for discussion among inspectors on a wide range of matters about administering the Act. Periodic practice reviews between DLAs would complement this and other existing informal communications between inspectors on common liquor licensing issues.

Reporting on performance

3.60
The Act makes each DLA responsible for carrying out activities consistent with the Act’s aim of reducing alcohol abuse. Measuring progress in meeting this objective requires the use of relevant indicators of outcomes related to alcohol-related harm.

3.61
We asked each DLA what information it was reporting about liquor licensing activity, and considered how that reporting related to the functions of the DLA under the Act.

3.62
Reporting was, at best, confined to activity measures related to processing (including timeliness), and the numbers of inspections carried out. No DLA was reporting on compliance levels or trends, using relevant indicators of outcomes. Outcomes might be defined in terms of community safety and well-being, with possible indicators including the views of residents, data about alcohol-related crime, and health-related data.

3.63
Providing assurance on compliance and on contributions to community outcomes will require DLAs to work closely with the Police and public health services. Compliance reporting might draw on the results of periodic and targeted monitoring activity, while possible indicators of changes in outcomes might include the results of controlled purchase operations2 over time, the number of offences associated with licensed premises (including data gathered by the Police), and data on alcohol-related hospital admissions.

3.64
Compliance and outcome measures can be used to review the effectiveness of liquor licensing policies and practices. Territorial authorities need to identify information relevant to assessing compliance and reporting on community outcomes. This will require them to work, in particular, with the Police and public health services. One DLA told us it used Police intelligence about off ending to influence the territorial authority’s environmental design, city planning, and liquor policy.

3.65
Evidence-based data from the Police can also show the effects of licensing policies and practices (such as licence hours). It has also been used to support evaluation of the effectiveness of intensified monitoring of targeted premises. For one area we visited, analysis of recorded offences over time, when compared against both local and national data, clearly showed the effect of ongoing collaborative and targeted enforcement action by the three regulatory agencies.

1: Section 102 of the Sale of Liquor Act 1989 makes the chief executive of the territorial authority the Secretary of the District Licensing Agency. That person, or their delegate, has administrative responsibilities under the Act. In practice, the Secretary commonly carries out the decision-making functions of the District Licensing Agency.

2: In controlled purchase operations, supervised volunteers less than 18 years of age attempt to buy alcohol from licensed premises. The operations are designed to test compliance with the provisions in the Act prohibiting the sale or supply of alcohol to minors.

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