FSA Board Agrees to Take Forward Meat Charging Proposals

FSA Chair Jeff Rooker said: ‘The Board has confirmed that it is not the role of the FSA, as the food safety regulator, to subsidise the meat industry for the cost of delivering official controls.

5/26/2011 --- Food Standards Agency Board discussed future charging for official controls on meat. In its discussion, the Board confirmed its view that:

* it is not a function of the FSA to subsidise industry and if a continuing subsidy is to be provided it should come from elsewhere
* providing the best possible protection for consumers from food risk should not be based on economic circumstances or the ability of an industry to pay

The Board agreed that:

* Full cost recovery should be introduced over a three-year period, beginning in April 2012.
* The consultation proposals should be amended to allow more small businesses to be included in the ‘low throughput’ category. The revised proposals mean that these meat plants would pay reduced charges in a tiered system, depending on the volume of livestock units or meat they process. For the first 1,000 livestock units processed, the reduction would be a maximum of 70% of the full cost charge. The next 1,000 would be subject to a 50% reduction. The next 3,000 would be subject to a 25% reduction. For meat plants processing more than 5,000 livestock units per year full cost charges would apply with no discount for any of the throughput.
* This would provide support of £3.2 million per year for about 570 establishments, as opposed to £1.4 million for about 420 establishments as originally proposed

The FSA estimates that removing the current discount would result in cost increases to the UK meat industry of approximately £20 million. This is against a UK meat market (excluding game) worth about £6.34 billion to the UK economy. The FSA does not anticipate that additional costs will be passed on to consumers, and there will be no impact on food safety controls.

In calculating the costs that will be passed onto the industry, the Board was provided with clarification on those attributed to pensions. Previous indications to industry stakeholders were that full cost recovery would include the current employers’ contributions for the Local Government Pension Scheme (LGPS), and also contributions payable to members of the scheme who had already retired. This figure was originally estimated as £7.6 million for 2011/12. Following a review by HM Treasury of the cost and the allocation of that cost, it has been agreed that industry will not bear the cost relating to the deficit in the Local Government Pension Scheme, which would have totalled £4.7 million. Therefore the pensions element within costs has been reduced to £2.9 million.

The FSA Chair will discuss the Board’s decision with Ministers in all four countries of the UK. There is also a requirement to send an Impact Assessment for the opinion of the independent Regulatory Policy Committee. The Board decision would then be referred to the Reducing Regulation Committee. This is a Cabinet Sub-Committee which considers issues relating to regulation, and approves all new regulatory proposals.

FSA Chair Jeff Rooker said: ‘The Board has confirmed that it is not the role of the FSA, as the food safety regulator, to subsidise the meat industry for the cost of delivering official controls. However, we have listened to concerns expressed about the impact on smaller plants of transferring this cost to the industry. That is why we have agreed to continue to provide support of £3.2 million in an extended low throughput category, to reduce the financial impact on those plants that would be most affected. Today’s Board decision is only the start of a process which will begin now with referral to the Regulatory Policy Committee and discussions with Ministers.’