FSA to debate Meat Hygiene Service costs increase

Proposals to increase industry charges for Meat Hygiene Service (MHS) official controls work call for an extra £1.2M from the meat industry from January 1 this year until April 1, 2014.

The sum is backdated to include cost increases from the beginning of this year. The suggestion follows a 14-week public consultation on the issue involving businesses, trade bodies and other stakeholders, which ended on March 25.
The proposal is to be discussed at the Food Standards Agency (FSA) board meeting on April 21. It takes account of additional cost savings of £3M to be achieved by the MHS during this period and represents an annual increase of 4.4%. However, it assumes that exchange rates as of March 31 will remain constant and the increase could be higher or lower depending on this factor.
It is hoped that the rise in charges, together with the cost savings will achieve the target of a £10M annual subsidy for the MHS from April 1 2014.
Breaking the increase in charges down by sector, red meat slaughterhouses would bear the biggest impact. Large businesses in the sector would see an annual increase of 13% in charges - equivalent to £48,145. Medium-sized businesses would see a 5% increase - or £1,205. Small businesses would see a similar rise - representing an extra £57 per year.
Increases would be much smaller for cutting plants and poultry slaughterhouses - just 0.4%, regardless of size. Further proposals would require charges to remain tiered according to business size.
Papers compiled by the FSA and MHS state: “Reductions in gross costs alone will not deliver the longer-term financial objective. Income from industry will also need to increase. Whilst the economy is in recession we anticipate a more cautious approach to charging increases - even though livestock prices remain high due to the weakness of sterling.
“However, we believe that as the economy recovers and further reductions in costs are realised, above inflation increases will be both justified and necessary to enable the £10M subsidy to be realised.”
Recommendations also include proceeding with changes to meat hygiene control charges, making them dependent on the time costs of carrying them out. That is despite objections voiced by organisations such as the Association of Independent Meat Suppliers, the National Farmers’ Union of Scotland and the National Beef Association.
These and other bodies argued that such a system might encourage the MHS or its contractors to increase the time taken for official controls to be carried out to generate extra revenue. They also feared it could lead to some businesses cutting corners to reduce official control times, increasing food safety risks.
The proposals state: “Following the proposed introduction of time-based charging in July 2009, hourly charge-out rates will need to increase significantly over the succeeding years to move towards near full recovery of costs from industry.”