The Food Standards Agency issued proposals in January 2001 (see 15 January 2001)to implement the recommendations of the Meat Inspection Charges Task Force. The Agency proposed that, from 2 April 2001, all slaughterhouses and cutting plants should be charged on the basis of the standard (headage/throughput) charges as laid down in EU Directive 96/43/EEC. However, where the actual inspection costs are lower than the total of the standard charges, it was proposed that the actual costs should be charged. The Agency also proposed that measures should be introduced to allow the Meat Hygiene Service to protect itself from inefficiencies or abuses resulting from the implementation of a headage based system. Additional charges were proposed, to be payable alongside standard charges to discourage inefficient operations by plant operators or attempts to abuse the system.

Separate consultation exercises were held in England, Scotland and Wales based upon identical proposals. The consultation exercises elicited a total of 49 responses. There was full support for the adoption of a revised system whereby plants pay the lower of their actual inspection costs or a charge based on the headage rates. However, although many respondents recognised the need to prevent inefficiencies, there was strong opposition to the proposed method for additional charges to be introduced alongside standard charges. There was also strong support for the adoption of agreed operational programmes, as recommended by the Task Force, and the introduction of an appeals mechanism if plants could not agree a programme with the MHS, or if they opposed the imposition of additional charges in particular circumstances.

The FSA's Response to the Comments Additional Charges:

The Agency has acknowledged the concerns that many respondents expressed about the original proposals for additional charges. Two key changes have therefore been made to this provision. Firstly, the Statutory Instrument (SI) has been changed to make it clear that the MHS may only levy additional charges where they have incurred additional costs as a result of 'inefficiencies' on the part of the plant operator. The definitions of 'inefficiencies' in the SI have been amended to make them more transparent and specific to the operational experiences of the MHS. A copy of the revised SI, as laid before Parliament, is at Annex 2

Secondly, the SI now states that the MHS and plant operators will, from time to time, agree an operational programme of agreed working hours and working practices. If plants observe the terms of their operational programme, they will not be liable for certain of the additional charges.

It should also be noted that the SI now contains a requirement for the MHS to notify plant operators if they intend to levy an additional charge.

Independent Appeals Mechanism

Linked to the question of additional charges is the concern many respondents expressed about the lack of an independent appeals mechanism. The Meat Inspection Charges Task Force had recommended that an element of independent arbitration be included with any control mechanisms introduced under a standard charge system. The FSA's original proposals had not included such a provision as it was felt that it would be too complicated and costly to have such a system in place from 2 April 2001. However, in view of the strong level of support expressed, the Agency has reviewed its proposals and amended the SI.

The new charging system therefore includes provision for the use of a simple and quick appeals mechanism in cases where the MHS and plant operators are unable to agree on the imposition of additional charges. It involves determination of the dispute by an independent person nominated by the FSA after consultation with industry representatives. This approach was welcomed at a meeting held with stakeholders on 27 February. Subsequently, stakeholders have put forward nominations for people to consider any appeals. An initial list has been prepared and is currently being considered by stakeholders. Under the system, plant operators will have one week from the date of notification that an additional charge is to be levied in which to appeal. The case will then be considered by an independent nominee who will have one month in which to make a decision.

Cold Stores

The Agency had proposed that cold stores should be charged on the basis of a fixed charge rather than actual costs. The proposal was for the introduction of 3 charge bands based upon plant capacity. The consultation exercise did not result in any opposition to this proposal, which had initially been suggested by the Cold Storage and Distribution Federation. The following charge bands will therefore apply per visit from 2 April 2001:
• Band A: Low capacity (up to 100 cubic metres) £30
• Band B: Medium capacity (100 - 25000 cubic metres) £45
• Band C: High capacity (over 25000 cubic metres) £75

Casualty Slaughter

A number of plants currently provide a casualty slaughter service, and some questioned how this would affect their charges under the new system. Under the new system, this service could be considered as part of the current working practices of the plant and therefore contained in its operational programme. As such, any casualty slaughter carried out would be eligible for headage rates rather than actual costs. If plants do not have a casualty slaughter service as part of their agreed working practices, then actual costs would be charged if they carried out such a slaughter outside of their operational programme.

Standard (Headage / Throughput) Rates

Some respondents asked whether different standard rates could be applied. It should be noted that the Agency is only able to levy the standard charges that are detailed in the EU Charges Directive. A copy of the rates for the year from 1 January 2001 is attached at Annex 3. The Euro rates are fixed, and the exchange rate to be applied each year is also determined by the terms of the Charges Directive.

The Meat Inspection Charging System to Apply from 2 April 2001

The key features of the new meat inspection charging system to apply from 2 April 2001 are:

• The charge payable by the operators of slaughterhouses and cutting plants in each accounting period will be the lower of either the standard charge(s) or the actual inspection costs (provided that, in line with the EU Directive, actual charges are at least 45% of the standard charge(s));
• Plant operators and the MHS will agree, from time to time, an operational programme based upon agreed working hours and working practices;
• Where the MHS incurs additional costs under the standard charge system due to inefficiencies on the part of the plant operator, they may levy additional charges;
• Plants operating within the terms of their operational programme will not be liable to certain of the additional charges;
• If a plant operator does not agree with the levying of an additional charge, he may instigate the independent appeals procedure;
• The introduction of fixed fees for MHS inspections at cold stores, based on plant capacity;
• Cutting plant charges will be based on the tonnage of meat entering the plant.