FSA Board briefing session: Review of delivery of official controls in approved meat premises

FSA Board
Dame Deirdre Hutton, Chair
Ian Reynolds, Deputy Chair
Richard Ayre
Tim Bennett
Chrissie Dunn
Michael Parker
Chris Pomfret
Bill Reilly
Nancy Robson
John Spence
Sandra Walbran

FSA Officials attending
John Harwood, Chief Executive
Andrew Wadge, Chief Scientist
Steve McGrath, Chief Executive, Meat Hygiene Service (MHS)
Vivienne Collett, Director of Legal Services
Terrence Collis, Director of Communications
Gill Fine, Director of Consumer Choice and Dietary Health
Richard Calvert, Director of Strategy and Resources
George Paterson, Director of FSA Scotland
Joy Whinney, Director of FSA Wales
Allan Hutton, Finance Director
Alick Simmons, Veterinary Director
Peter Hewson, Deputy Veterinary Director
Chris Stone (MHS Options Review Team;
Alison Gleadle, Head of TSE Division
Paul Holley, SRM Branch, TSE Division
Jane Downes, Veterinary Technical Director, MHS
Mike McEvoy, Director of Finance, MHS
Kevin Goddard, Head of Business Development Unit, MHS
Alastair Cannon, Board Secretary
Keith Gregory, Board Secretariat
Claire Voller, Board Secretariat

External attendees
John Gerard, Managing Director of Hall Mark Meat Hygiene Ltd
John Dracup, Livestock Director for St Merryn Foods
Tim Porter, Managing Director of Cragg Ross Dawson

1. The Chair welcomed Geoff Tierney (Programme Manager, Options Review Team for Meat Hygiene Controls) to the meeting and invited him to introduce the briefing session and the external guests. The Chair noted that a summary of the briefing session would be published on the FSA’s website.

2. Geoff Tierney welcomed the following external participants to the meeting;

• John Gerard, Managing Director, Hall Mark Meat Hygiene Ltd - a contractor working with the MHS
• John Dracup, Livestock Director, St Merryn Meats
• Tim Porter, Cragg Ross Dawson (consumer research group)

3. Geoff Tierney informed Board members that the aim of this briefing session was to present the main findings of Phase 2 of the Review and its recommendations, and to run through the evidence base in advance of the discussion at the open meeting the next day.

4. Geoff Tierney reminded Board members that, following consideration of Phase 1 of the Report, the Board had agreed that Phase 2 of the Programme should look in more detail at five delivery models. Two of these were general models for the delivery of all Official Controls:

• a transformed MHS (TMHS)
• FSA contracting with one or more control bodies i.e. delivery partners

There were also three models that could work with either of the above:

• local authority delivery for small and lower risk plants
• more joined up working between the MHS and Animal Health
• increasing food business operator responsibility, starting with the poultry sector

5. The final report had 18 recommendations for Board approval relating to seven strategic decisions:

A risk based approach to regulation – based on national measures, with the industry having more leadership, and a longer term (5-10 years) strategy to work with EU partners to secure the regulatory changes necessary;

A transformed MHS – with a series of targets around efficiency, performance and contestability;

Charging and cost-sharing recovery – this was the most contentious issue, and public consultation on increasing throughput rates was recommended, along with consultation with stakeholders on developing a new charging system. This would include issues such as decisions relating to the need to replace throughput charges (headage) with a system of time-based charging;

Poultry industry sector – to promote Food Business Operator (FBO) responsibility with the poultry sector employing their own meat inspectors;

Low throughput plants and local authorities – this opportunity would be opened up for local authorities that were interested in enforcing controls in low throughput plants. Delivery of controls in these plants would also be reviewed to ensure they were as flexible as possible and changes in EU measures would be pursued to allow this;

Continue discussions with Animal Health – to allow closer working across the food chain;

Advisory Body – this would allow stakeholders to be involved. Membership of the Advisory Body would be FSA, TMHS, agriculture departments and representatives of the FBOs, consumers and contractors.

6. The Chief Executive of the MHS gave a presentation that provided an insight into the service delivery perspective. His presentation slides are attached at the link below.

7. John Gerard (MD, Hall Mark) spoke about his hopes for the review from a contractors’ perspective. He was keen for the FSA to press forward with doing a pilot on alternative models. This would allow a real focus on improving cost and delivery so that innovation from the private sector and greater flexibility could be taken into account. It would be important to develop a process around people to provide a high quality service. This would mean there was less chance of increased turnover and poor job satisfaction. The delivery partnership model would provide this as well as allowing much tougher sanctions where needed. There was confidence in the current controls in the private sectors. Effective delivery teams in plants would lead to improved morale, which in turn would provide better risk-based solutions. The delivery partner model would also allow more direct communication by simplifying the links from the plant to the FSA. Although there had been a number of reviews, this one had raised expectations that it would lead to significant change. In conclusion, John Gerard noted that Hall Mark supported the single delivery model and a pilot would be helpful in providing practical evidence that could be used in the future.

8. In discussion, Board members asked the following questions:

Q. What timescale would be envisaged for such a pilot?
A. John Gerard siad 12-18 months.

Q. If the control body model was adopted, was there already capacity for this approach? Had the industry the capability and expertise to enable that model?
A. John Gerard said that larger organisations already had the staff expertise in place but a shift in emphasis would be needed from the back office to the front line.

Q. Why was a pilot needed to improve risk capability? What incentives would there be for small plants in rural areas?
A. John Gerrard said that flexibility within the team would provide greater efficiency, including improved facilities in rural plants. Greater efficiencies could be achieved by sharing back office functions. It was expected that about 10-15% of functions would be scaleable based on the current marketplace. However, to test this properly, the pilot should be run on a national rather than a regional basis.

Q. The Chair noted that reducing costs was as important to the FSA as it was to the industry. There were two strands to this: i) more efficient working within current official controls and ii) changes to EU regulations. What was the split in efficiency savings attributed to each of these?
A. Geoff Tierney estimated that 30% of efficiency savings were achievable under current regulations whereas 70% could only be achieved by changing EU legislation.

Q. On the TMHS option, it was noted that the economic benefits put forward in the final report (page 52) were based on a baseline budget of £91.3m. Was this dependent on changes at EU level?
A. The Chief Executive of the MHS responded that, when the MHS had done the cost analysis of the TMHS option, this had been based on what could be realistically delivered. The savings identified under the TMHS were not dependant on changes to EU legislation. However, short term savings could be achieved by looking at the way the national measures were applied.

9. John Dracup (Livestock Director, St Merryn Meats) spoke about his perspective as a large FBO, and the high levels of controls relating to hygiene, temperature and stock management already in place. St Merryn Meats had multi-sited plants and was a market innovator in centrally prepared meat. It was a supplier to a major supermarket. The delivery of high quality and safe meat to its customers was essential to the company’s success.

10. John Dracup noted that his company dealt with about 6,000 farmers throughout England and Wales. They underwent numerous different types of audits, for example by the MHS, Assured British Meat, the Soil Association, and Trading Standards. The industry had been able to recover from the beef export bans and foot and mouth outbreaks, by demonstrating effective working practices to re-win consumer confidence. Following the BSE crisis, good tracebability systems were now in place. It was therefore logical to move to the next stage of the FBO delivery model. The MHS operating costs added additional cost burdens to the industry, which were passed to the consumer or taken off the cost of the raw product. The industry was not in a position to accept these additional costs. There were also concerns in respect of consistency in delivery between sites and within regions, and that value for money was needed with a cost effective, efficient service. Stakeholders would want to be involved in establishing the terms and conditions of those working in plants.

11. In discussion, Board members raised the following questions:

Q. Was the commitment to appropriate controls the same throughout the industry?
A. John Dracup confirmed that the industry consisted of businesses of varying sizes and customer bases. However, the key point here was that each plant should operate quality control parameters that were appropriate and based on risk.

Q. The Chair asked that, in respect of efficiency, certain inspections were in place to meet EU obligations. How could changes to efficiency be made through changes to policy? Was the expectation of zero risk and 100% compliance realistic?
A. John Dracup noted that 100% compliance was needed. The debate here was how the meat industry was inspected and controlled, and how this could be more cost effective, for example by random audits on FBO operations.

Q Moving towards more risk based processes would mean that sanctions imposed were more severe. Was the industry ready for that?
A. John Gerard responded that the message he had picked up from the industry was that they wanted more ruthless enforcement where there was a lack of compliance. John Dracup noted that loss of business was the most effective sanction.

Q. In terms of duplication and earned autonomy, did the modelling cover this? What was the impact on workforces?
A. Geoff Tierney confirmed that assumptions on staff reductions were included in the modelling, but beyond the five year mark a change to EU legislation would be needed.

Q. How was it possible to achieve the efficiency savings while maintaining 100% compliance?
A. John Dracup confirmed that this would be individual to specific plants.

Q. How do you handle internal conflicts of interest between technical teams (for example customer requirements) and customer sales? Who takes decisions when there are conflicting views?
A. John Dracup said that the technical teams had autonomy over the rest of the teams. Food safety overruled commercial pressures. The company already felt that it took ownership for ensuring safety and hygiene, and would be able to take full responsibility for this including competent authority audits and other health functions.

12. Tim Porter, Managing Director of Cragg Ross Dawson (an independent qualitative research company), spoke to the Board about the results of the small scale quantitative study involving consumer focus groups. Although the numbers taking part in the study were small, the results were consistent enough to stand up against larger studies.

13. The results showed that those surveyed were aware of BSE and other scares, and considered that government authorities ensured that meat was safe; the industry could not be trusted to do this to the same extent. Those surveyed did not know about the MHS, although there was an appreciation of the work they did when this was described to them in particular the full time presence of vets and meat inspectors in abattoirs. There was a high awareness and positive view of the FSA, and the general view that the FSA should retain control of the system. There was some concern expressed about independent contractors, and that a minimum of 50% of vets should be employed by the FSA. The TMHS was the most acceptable option as this would increase the proportion of controlled vets, but there were certain concerns in respect of delivery, IT systems and staff cuts. The FBO control body was considered the least attractive option, which would be the same as a privatised service and would not provide a single, national delivery option. The industry was not trusted to be self-regulatory. The LA delivery option had also been rejected as there was not enough confidence that this would work effectively. There were clear concerns expressed that the role and standing of independent contractors needed to be understood better and that official controls should not be driven by commercial interests.

14. In discussion, Board members asked the following questions:

Q. There was scepticism on the size of the sample used for this study; was this considered to be representative, and how much knowledge did people have of the existing system?
A. Tim Porter said that the sample size was not statistically valid and that those included in the study had to be prompted and had not much awareness of meat hygiene issues. This was more of a snapshot of views rather than a salient review.

Q. Had the consumers in the study indicated that they were prepared to pay a cost?
A. Tim Porter said that those surveyed had not indicated any views on cost.

Q. People were aware of health stamps on the meat they purchased, but were they sure of the process behind this?
A. The Chief Scientist commented that what was important here was that people were confident that meat was safe and were not getting ill.

15. The Chair concluded by noting that this had been a useful briefing and thanked external participants and Geoff Tierney for organising it.