The exhibition of a film is regulated entertainment under Schedule 1 of the Licensing Act 2003. If a premises licence or club premises certificate authorises the exhibition of a film, sections 20 or 74 of the Act make it mandatory for a condition to be included in the premises licence or certificate requiring the admission of children to films to be restricted in accordance with recommendations given either by the British Board of Film Classification or by the licensing authority itself.
The Licensing Authority can choose to adopt its own classification, although the Guidance issued under the Licensing Act recommends that licensing authorities should not duplicate the effort underpinning the BBFC's classification.
A licence or certificate could be revoked or withdrawn on an application for review by an interested party (which could include a local resident), if the licence or certificate owner breached the mandatory condition outlined above, or otherwise acted in a way which contravened the licensing objectives.
Local residents would not, however, have a basis for challenging the classification of a film by the BBFC or the local authority under the Licensing Act 2003. The classification decision is a matter which falls outside the regulation of the premises licence or club premises certificate under the Licensing Act 2003. To challenge a classification of a film given by the BBFC or the local authority, local residents would have to pursue alternative avenues e.g. seek a judicial review.