error on line 1 trying to execute a script using psql

I am attempting to generate a temporary function to execute some dml with
the following script:

create or replace function setuplicense() returns integer as $$
declare
hwcustid integer := 0;
retval integer := 0;
begin
insert into license.customer
( customer_id ) values ( hwcustid );
commit;
return retval;
end;
$$
LANGUAGE plpgsql;

select setuplicense();

When running this with psql I get the following:

Error: syntax error at or near "create"

Does anyone have a suggestion as to what is causing this?

Thanks