The Board proposed an amendment, subject to EU minimum charges, which means the proposal for three charging bands imposed on smaller throughput abattoirs with effect from April 2012 would be progressive rather than a “step change”
The measures will provide around £3.2m by way of support to around 573 establishments that the FSA regulates.
Pension fund deficit
The FSA also agreed not to impose historical meat inspector pension fund deficit liabilities on companies as part of the new arrangements.This had caused considerable concern to abattoirs, which argued that the measure was unfair on them.
Following advice received from HM Treasury, FSA chief executive Tim Smith said that the government would now foot this bill. “The pension cost for 2011/2012 will be £2.9m not £7.6m,” he said. “This is really important.”
This reduced the meat inspection cost recovery bill to the industry from £55m to £50.3m, he said. The FSA has so far delivered £1.3M in efficiency savings in its meat inspection operations, but there is “an awful lot more to be tapped into”, the FSA’s director for Scotland Charles Milne said.
Under the original “tiered approach” proposals, whereby the FSA had sought to recover the full costs of inspections, abattoirs with a throughput of less than 1,000 slaughtered animals a year would receive support for 70% of their inspection costs, while those between 1,000 and 2,000 would receive 50% support and those between 2,000 and 5,000, 25% of their costs.
However, following consultation with stakeholders over recent weeks, the FSA Board accepted that this could distort development of the primary meat processing sector, given a disincentive for abattoirs to move into the higher bands, since all their animals would then be charged at the higher rate.
The amendment means that those slaughtering above the 1,000, 2,000 and 5,000 units a year levels could still benefit from the higher levels of support for those units they process which fall under the lower band rate levels. This change will cost the FSA an extra £0.6M a year above the original proposals.
While hard-pressed small abattoirs are likely to welcome the changes, the amendments are unlikely to dispel industry criticisms that it is being subjected to an inefficient and costly inspection regime by an effective monopoly in the FSA.
FSA Board member and farmer Tim Bennett said: “We have failed to convince [meat processors], because we have not got evidence that we [the FSA Operations inspections system] are pretty good about what we do.”
Bennett called for evidence that the inspection regime in the UK was as efficient as others across the EU. “We are a monopoly supplier so we need to prove that we are better than the rest of the industry.”
Unlike in other food manufacturing sectors, the EU’s meat inspections are covered by prescriptive legislation. While the FSA is seeking to make efficiency savings in UK inspections to reduce the cost to industry, it is also working with partners in Europe to get legislation changed to permit a more risk-based approach to meat inspection.