Future funding of UK meat controls review

Friday 6 November 2009

At its open meeting on Tuesday 10 November, the Food Standards Agency Board will review the Agency’s policy on the future funding of UK meat controls. This concerns the costs of official inspections of abattoirs and cutting plants.

The Board paper on UK meat controls, which can be found via the link below, was published today and will be considered at the meeting.

At present, the industry pays 35% towards the cost of controls, around £24m of the £69m total cost. The remainder is funded by Government: £20m from Defra for the costs of animal welfare and the Meat Hygiene Service’s (MHS) specified risk material controls (specified risk material consists of those parts of the animal that contain almost all BSE infectivity). The remaining £25m is funded by the FSA.

The MHS, which undertakes the controls in Great Britain, has already reduced its operating costs from £91m in 2006/07 to £69m in 2009/10, a reduction of 24%.

In Northern Ireland the controls cost £7m, of which around half is recovered from industry. The other half is paid as a subsidy.

Agency Chief Executive Tim Smith said: ‘We are asking the FSA Board to consider whether the continued provision of a subsidy by the FSA is consistent with its position as regulator.

‘A significant part of the FSA’s budget is required to subsidise the meat processing industry, which limits the Agency’s ability to do as much as we would like in work such as dietary health, campaigns, research and information for consumers. As financial pressures increase, the continuation of the subsidy would force the FSA to reduce or end investment in other priorities.’

If the Board chooses to move towards full recovery of the current subsidy, analysis has shown that even if the full costs were passed on to retail prices the impact on consumers would be minimal – less than a penny (0.8 pence) on a whole chicken retailing at £4.00; less than half a penny (0.47 pence) on 500g of lean mince retailing at £1.92.

The Board will be advised that the UK Government has a clear policy to charge for publicly provided goods and services. If full costs are not recovered then there should be a plan to achieve full cost recovery within an agreed period or explicit reasons for the continuing subsidy should be set out.

Following the Board’s discussion on the principles which should underpin the future charging policy, the FSA will begin an open process of dialogue and consultation with the food industry and other stakeholders on this issue, to inform its advice to ministers.