Councils should have the power to determine event licensing fees to ensure they fully cover the associated administrative costs, the Local Government Association (LGA) has said.

The LGA warned ‘outdated' licensing fees meant taxpayers were heavily subsidising some commercial events.

It said national fees fixed by the Government have not been updated since 2005, with some festivals only paying councils £100 for a licence to host an event.

Previous research by the LGA showed that licensing authorities had a net deficit of £10.3m in fees - a figure likely to much higher now due to rising inflation.

Deputy chair of the LGA's safer and stronger communities board, Clive Woodbridge, said: ‘The Government has underestimated the costs councils incur in administering the Licensing Act for more than 15 years.

'With councils facing ever increasing budget pressures, there is a dire need for fees to be updated to fairly reflect current administrative costs.

‘Councils should be allowed to set local fees, which will enable them to charge appropriately for each event.

'At the very least, we urge Government to recognise the need for an uplift and commit to a flat rate increase to the 2005 fee levels.'