Community groups have vowed to keep on fighting for a fair deal on music licensing following the government's decision to remove the licence fee exemption for charities' public use of music, says the Community Sector Law Monitoring Group.

Last week, the government removed the licence fee exemption for charities' public use of music.

A statutory instrument was laid before Parliament removing the exemption, with the changes due to come into effect on 1 January 2011. But charities will be given a further 12 months to prepare, and discussions will continue on fee levels.

The two licensing bodies PPL and PRS for Music will also collaborate to ensure charities will only have to make one application, and a new independent reviewer will be created for those who feel they have been treated unfairly.

Community sector campaigners have said they are “disappointed” with the government’s decision to end voluntary and community groups’ exemption from paying for music licences before a deal on charges had been reached.

The CSLMG said the change in licencing would affect thousands of small community charities’ activities such as tea dances for older people, youth clubs, children’s music and movement groups, fundraisers and fetes and festivals. CSLMG has warned that these activities may have to be stopped or pass on their costs to users when PPLK UK begins charging.

David Tyler, chief executive of Community Matters and chair of CSLMG, said: “We are disappointed that the legislation has been introduced now as we are in the final stages of negotiation with PPL to make the charges more affordable.

"We recognise that government were under pressure to legislate and are grateful for the support they gave the sector over this issue, but we don’t regard this as a done deal at all. We have fought hard for 18 months for fair treatment for the charities we represent, and we will carry on trying to get a fair deal.

“We are pleased that PPL accepted our proposals to reduce the costs for micro groups (those under £10,000) who will mostly pay £40 for each of the two licences required. However, those earning just £50,000 a year will have to spend £1,000 on music licences each year and the fees have no limit as they are a proportion of the group’s income. We think there needs to be a cap on what groups are liable to pay if we are to see more people coming forward to set up groups in their neighbourhoods.”

CSLMG also welcomed the delay in implementation until 2012 as this at allows time for negotiations to continue and for the sector to argue for affordability. The concessions CSLMG have so far achieved are:

• a £40 flat fee for groups with incomes under £10,000 a year
• a single scheme to collect the fees for both PRS for Music and PPL
• the licence applies only to community buildings and most groups using the building would be covered by it
• the licence will cover the land immediately around the building and any vehicles the group may own.