Liquor licensing by territorial authorities

Performance audits from 2008: Follow-up report.

Under the Sale of Liquor Act 1989 (the Act), each of the 73 territorial authorities (city and district councils) has the status of a District Licensing Agency (DLA). DLAs are responsible for considering applications and issuing licences for the sale and supply of liquor to the public.

The scope of our audit

In November 2007, we carried out a performance audit of how 12 selected territorial authorities were managing their liquor licensing responsibilities under the Act.

Our findings

In our 2007 report, we identified four aspects that territorial authorities needed to improve:

  • strengthening compliance monitoring;
  • increasing staff resources;
  • working more closely with regulatory partners or the hospitality industry; and
  • improving performance reporting.

All the agencies we dealt with during the audit endorsed our findings and the issues we raised for consideration by territorial authorities.

We encouraged each territorial authority to review its own liquor licensing practices against the better practice framework outlined in our 2007 audit report, noting that some territorial authorities had already done this. Acknowledging that such changes could take time to consider and put in place, we said that we would seek information on each authority's response to our 2007 report during 2009.

The response to our report

We asked territorial authorities to tell us whether they had used our report to improve the four aspects outlined above.

We also asked territorial authorities to tell us how they had used our report to confirm, review, or change existing practices. We received responses from 34 territorial authorities.

The responses from the 34 territorial authorities show that our 2007 report has been, and continues to be, well used. In general, the responses reflect a commitment to ongoing improvement, and we hope that our report will continue to serve as a useful source of reference for the sector. Since our report was published, there has been increased awareness of the effect that liquor has on society; in particular, the contribution its harmful use has on crime and public health. There has also been greater scrutiny placed on the access to, and availability of, liquor. Local authorities play an important role in regulating the supply and sale of liquor, and in working to reduce alcohol abuse by ensuring compliance with liquor licensing requirements and the Act.

Most of the territorial authorities (26 of the 34) had used our report to review their practices, and half had changed their practices in response to our report. Some authorities said our report had provided useful assurance about their existing practices or had contributed to ongoing improvement. Three of the authorities told us they had made some changes in direct response to feedback from our audit team after our team's visit. Some of the 34 authorities had used our report to help draft or review their liquor policies or strategies. Eight authorities had tightened their regulatory practices to better comply with the provisions of the Act.

Compliance monitoring

Of the 34 authorities, 14 had strengthened their compliance monitoring in response to our report; in most cases through a better assessment of risk. This should improve both the effectiveness and efficiency of monitoring activity, enabling authorities to better target licensees and premises requiring more frequent inspections.

Staff resources

Ten of the 34 authorities had increased their staff resources in response to our report, or had sought additional resources. This will enable those authorities to increase monitoring of compliance and strengthen enforcement. However, four other authorities told us that limited staffing continued to prevent them from carrying out monitoring and enforcement activity as they would like.

Relationships with regulatory partners or the hospitality industry

Fifteen of the 34 authorities were working more closely with their regulatory partners (the New Zealand Police and Public Health units within district health boards) in response to our report, or were planning to do so.

Performance reporting

Our 2007 audit found limited reporting on performance, with measures focused on levels of activity (such as numbers of inspections) rather than on trends in compliance and improvements in community outcomes. Eight authorities told us they had improved their performance reporting, or were planning to do so, with four of those having made improvements in response to our report. Given the findings of our audit in 2007, we encourage local authorities to continue to review the relevance and usefulness of their performance reporting.

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