The Housing Minister has formally clarified that councils must not generate profit from selective licensing schemes. This comes amid renewed scrutiny into Nottingham City Council’s handling of landlord licensing fees, a concern closely watched by landlords across the East Midlands.
In a recent government response, the Minister emphasised that selective licensing fees “should only be used to cover the costs of running schemes” and that these funds must not be diverted to support unrelated council services.
For years, however, Nottingham City Council failed to ringfence income from its selective licensing scheme, a requirement intended to ensure transparency and accountability. An independent report by accounting firm Ernst and Young confirmed that the council only began proper ringfencing of these funds in 2024.
According to council expenditure data, over £7 million was spent on selective licensing across two financial years:
- £4.2 million in 2020/21
- £2.8 million in 2021/22
Landlords and members of the East Midlands Property Owners (EMPO) association have long raised concerns about the financial transparency of licensing schemes. The recent findings and ministerial clarification now reinforce the ongoing call for clearer accounting and stronger governance of licensing schemes.
Nottingham City Council has issued a statement acknowledging the seriousness of the report, while claiming there is no evidence of actual misuse of funds.