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Statutory Services Review Questions and Answers

General

  • Why do fees have to change?
    • Current fees for Plant Health statutory schemes in England and Wales, for National Listing Plant Breeders' Rights in the UK and Seeds Marketing in England and Wales do not reflect the cost to Government of providing these services.
  • The current reviews of the EU Plant Health and Varieties and Seeds regimes are likely to lead to changes to the various services. Why not delay a review of statutory charges until the EU reviews are complete?
    • After many years of not increasing charges in line with increasing costs, we are no longer able to sustain the levels of funding required to fill the gap. Fera is proposing to phase FCR over a three year period to allow more efficient working practices to be developed and implemented with industry. Revision of the EU regimes provides an opportunity to improve risk targeting and encourage sharing of responsibility, but is unlikely to substantially reduce the overall cost of the measures needed to protect plant health and ensure availability to growers of healthy seed and planting material.
  • How do the fees charged by Fera compare with other EU Member States?

    • Fees charged by other Member States have been taken into account in the impact assessments prepared for each service. The level of charges applies varies across Member States. Several Member States also apply fees intended to fully recover costs, at rates which are not dissimilar to those which we will apply in England and Wales. A number of others charge fees which are lower than those proposed for England and Wales. A recent report by EU Commission (DG SANCO, 2009) concluded that "Although evidence of variations in fee levels were found between Member States, there is no evidence of significant distortion in competiveness between Member States caused by different fee levels. Other factors affecting competiveness appeared to be more significant."

    However, impact on competition remains a risk that will need to be monitored after the new fees are implemented. We will also take this into consideration in our revised impact assessments and the phasing of fee increases towards full cost recovery.

  • Has the EU published a list of current charges by country?
    • The EU does not publish a comprehensive list of the fees charged by other Member States. Fera is preparing a database of the fees charged elsewhere in Europe, and would be keen for industry to provide any information they have on the charging schemes in other Member States to assist us to update our impact assessments for each of the regulatory fees in question.
  • Why are costs in England and Wales so different to those in Scotland and in other EU Member States?

    • For some of the services, a move to full cost recovery will make fees in England and Wales higher than those in Scotland. However, Scotland have also announced an intention to review fees to ensure full cost recovery. It is likely therefore that any major fee differential and risks to competition are likely to reduce. A different method for calculating costs is applied in Scotland and Fera is looking at other fee structures and other ways of implementing these regimes to see if there are lessons which can be learned and applied in England and Wales.
  • Has the creation of Fera driven costs up?
    • No. On the contrary, the formation of Fera has provided an opportunity to better understand the true costs of service provision and to drive efficiencies in our cost base. Fera's costs per unit inspection completed have decreased over the last two years.
  • How much of the hi-tech laboratory at Sand Hutton is the industry being asked to pay for?
    • The new charges are designed to only recover those costs that are directly associated with the service provided. Full cost recovery is not a mechanism to fund any other area of Fera or Defra. Fera accounts are audited annually by the National Audit Office.
  • How efficient/effective are Fera's statutory services?

    • Defra and Fera have been seeking to reduce the costs associated with statutory services over a number of years. In order to further reduce cost it is important that we work with industry to ensure we only undertake activities that which government should do, and industry undertakes that which it should be responsible for. By 2014 we plan to have optimised delivery of these services such that the overall costs to industry and Government are minimised.
  • How transparent are the costs?
    • Our charging scheme has been developed in line with Treasury guidance to be straightforward, clear and accessible to scrutiny by our customers and Parliament. Further changes may be needed in future to ensure that companies who comply with scheme rules and help keep costs down pay less than those who don't.
  • Are the increases in fees likely to lead to some businesses relocating to other areas of the EU?

    • Responses to the Plant health consultations did not identify this as a substantial threat. This remains a key question for industry in the formal consultations on exports and plant varieties and seeds, so that Fera can provide a considered view, supported by evidence from industry, to Ministers.
  • Why can't we look now at options for reducing costs and make the processes and procedures more efficient?
    • Fera has been working with a number of representative Trade Associations in developing Plant Health and Varieties and Seeds Government/Business taskforces, whose main aim will be the development of more cost-effective services, with simple and transparent charges. The first of these Taskforce meetings is being scheduled for April 2012. Their objective is to arrive at cost effective systems developed in liaison with industry, which protect the UK from plant pests and disease, provide efficient systems for national listing of varieties and seed certification, and are compliant with legal requirements. The recommended option, which is now being adopted for plant health, to phase increases in fees, balances the need to minimise the impact on industry, whilst continuing to move towards full cost recovery and removing the financial cost of service provision from the taxpayer.
  • Some of Fera's IT systems, such as e-Domero, are inefficient and costly - are you looking to change them?

    • We are continuously working to improve Fera IT systems to provide efficient and cost effective services. However, Fera is committed to the e-Domero system for the foreseeable future, as this interfaces with a number of other Government data handling systems (e.g. HMRC) at our ports and harbours.

Plant Health Services

  • Which services were covered by the review of fees?
    • The following Plant Health services were covered by the consultation which ran from 11 October to 5 December 2011:

    • Import inspections of plants and plant products
    • Import inspection service of potatoes originating in Egypt
    • Plant health licences
    • Plant passports
    • Seed potato certification scheme

    Export certification services will be covered in a separate consultation.
  • How were responses to the consultation taken into account in deciding upon which option to adopt?
    • Fera welcomes the additional information and constructive suggestions provided by respondents. Full consideration was given to the results of the consultation and views incorporated into the Impact Assessments. Evidence of costs, benefits and risks provided by respondents were predominantly in line with those reported in the consultation and so no substantive changes were required to the Impact Assessments and the policy options under review.

    Final Impact Assessments have been prepared and these, together with the summary of responses, were used by the Minister when deciding to proceed with Option 3 (phased fee increases to reach full cost recovery in 2014/15) and the introduction of new fees legislation.

  • What issues were identified by respondents to the consultation and how have they been addressed?
    • The consultation emphasised the importance of a number of key issues to businesses including:

    • Transparency of service costs
    • Efficiency of the service
    • Ability of businesses in England and Wales to compete with those operating in other parts of the UK and EU with cheaper services
    • Acknowledgement of the public good role of some of the service sectors and therefore consideration of continued taxpayer contribution to the costs

    Fera has provided detailed breakdown of service costs in each of the five service Impact Assessments, has worked with representative trade associations to identify areas where future efficiencies could be made and provided data, supported by EU-wide reviews of statutory fees, that concludes that these fees are unlikely to significantly distort competiveness. It should also be made clear that, even at a time of severe economic pressures on public finances, the Government is committing significant funds (>£10m pa) to the area of plant health, that are not subject of recovery via fees. This includes > £1m p.a. supporting at R and D on plant pests and diseases.

  • Why can't the increase in fees be postponed until the Taskforce reviews are complete?

    • While we understand why some stakeholders would wish to see any increase deferred until the Taskforce reviews are complete, any delay in increasing fees carries considerable risk for the overall plant health programme. Fera's allocation of funding for plant health work is falling, following the spending review in 2010. Further delay in moving to full-cost recovery for statutory plant health services could require further cuts to be made, both to those chargeable services and to the publicly funded work on surveillance and eradication that provides plant health security for growers. It is therefore important that the shortfall in cost recovery is addressed as soon as possible.
  • When will the new fees be charged?

    • The first phase of the move towards full cost recovery for statutory Plant Health services will apply from 6 April 2012 and will see increases in fees for import inspections, inspections of potatoes originating in Egypt, plant health licences, plant passports and the seed potato certification scheme.

    Implementation of new fees for the export certification service is being proposed for October 2012.

  • Will Defra allow the industry to self-regulate through the broader adoption of the Assured Trader Scheme to cover more than the fruit and vegetable marketing standards?
    • We agree that there is a need for better risk targeting within the EU Plant Health regime. The UK has long argued that EU rules are insufficiently risk targeted, and we will continue to pursue that agenda as part of the current review of the EU plant health regime. That review provides an opportunity to reconsider the roles of official inspectors and industry in monitoring compliance in different areas of regulation. The Commission's intention to bring all food safety, animal health, plant health and varieties and seeds regulation under the overarching framework of Regulation 822/2004 provides further opportunities in this respect. However, we feel it is unlikely that an assured trader scheme such as that which has been proposed to date could be easily transferred to a quarantine regime, as the plant health and EU quality standards regimes are very different. Experience has shown that, whilst individual importers may have some control over the quality of the material they receive, they are unlikely to have as much control over the pest and disease status of what they import. The risks associated with a consignment which fails to meet the appropriate quality standards are significantly less than those arising from plant pest or disease problems. A single infested consignment could lead to new pests and diseases establishing in the UK causing substantial damage to British agriculture, horticulture and the environment. Phytosanitary controls implemented at the country of origin, supported by some form of trade facilitated independent or UK government sponsored auditing could offer a cost effective way forward, and we will be continuing to explore possibilities with stakeholders and promote such a position with the EU.
  • As well as Defra regulating our imports we have the Food Standards Agency and the Port Health Authorities overseeing a variety of products coming into the UK. Why can't these inspectors share information on imports through an integrated IT system instead of relying on importers having to duplicate the same information to separate agencies? Why does the industry have to bear the cost of the lack of integration across Government departments and agencies?
    • We recognise the need to link as far as possible the various IT systems through which industry interacts with regulatory authorities overseeing import controls. The PEACH system used for the notification of plant health controlled imports is integrated with HMRC's CHIEF system, although the two remained separate as not all entries are required under both systems. A single system would have introduced additional burdens for industry. The Automatic Licence Verification System (ALVS) was always intended as a pilot which could be extended to other regulatory regimes which need to link with customs clearance. Before developing the ALVS system we did consider using CHIEF as an alternative, but this would have been a more costly, complex and risky solution. In addition there was an opportunity to develop ALVS to an earlier timetable and to deliver savings to the industry. The system is working well and 24,000 consignments have been handled by it since January.
  • Why can't Fera Plant Health Inspectors carry out checks on behalf of the Port Health Authorities and the Food Standards Agency on so called 'high risk' products to save time and resource for both Government and the industry?
    • We welcome any cost effective suggestions that might facilitate co-operative working in areas of overlap between government agencies and/or inspectorates. These could include reviews of roles and responsibilities between industry and government (which remain in compliance with the requirements of EU and UK legislation). It is also worth noting that most 'high risk' products in food safety terms are not currently covered by the plant health regime.
  • Why don't Plant Health charges reflect the risk posed by particular types of material?
    • As mentioned above, we are arguing for better risk targeting in the review of the EU regime and rebalancing of effort towards plants for planting rather than plant produce. We would welcome any support which the Fresh Produce Consortium and Freshfel can bring to bear on the Commission to reduce the level of official inspections required on plant produce. However, produce is not risk free - the introduction of Tuta absoluta (South American tomato moth) and its major impact on tomato growing around the Mediterranean is an example of the risk imports of produce can pose. Drosophila suzukii is another serious pest which is spreading around the world on plant produce and can now be found in Europe.

    One element of risk targeting which the UK has already secured, when import elements of the regime were clarified in 2002, is the so called "reduced checks" provision. Under this provision a trade in a particular type of produce from a particular country may be checked at less than 100% when there is a documented history of compliance. Of the 105,000 consignments imported into the UK last year, about 40,000 consignments of fruit, vegetables and cut flowers were excluded from the inspection requirement under the "reduced checks" provision and subject to reduced inspection charges. The UK is one of the few Member States that make use of the reduced checks provision and seeks to extend the scope of the arrangements where ever possible. We are happy to explore other ideas which could both reduce our joint costs and/or lead to other reduced burdens, while maintaining the appropriate level of control needed to protect UK plant heath and meet our legal obligations.

  • The European Commission is carrying out a review of the Plant Health regime at the moment. Can you assure UK companies that there will be a level playing field across Europe and that they will not be penalised by any moves to 'gold plate' regulations?

    • UK objectives for the review include: more timely decisions; better risk targeting, and; improved collaboration between Inspectorates. These are intended to ensure a robust, effective and proportionate regime. We will be looking for solutions which are technically justified and provide improved protection from harmful organisms but impose the minimum possible burden on both industry and Government. Improved risk targeting to ensure that the highest risk trades are effectively controlled, while avoiding unnecessary measures for lower risk produce, is one example of how we believe the system could be improved. We will continue to consult with industry representatives about the review of the regime and the UK's objectives. As regards charges for import inspections, UK policy is for fees to recover costs of services provided. We welcome you raising your concerns that there is not a level playing field across all Member States. EU legislation on import fees requires that all Member States charge at least a minimum level - some of course charge substantially more. The Food and Veterinary Office are responsible for auditing arrangements within member states, but if you have any evidence which we can present to the Commission that member states are not complying with their obligations on fees we would be happy to receive it - and to press the Commission to ensure that this requirement is correctly applied.

National Listing and Plant Breeders' Rights and Seed Marketing Schemes