Pollution Control (Hansard, 16 March 1992)

§ Mr. Trippier

Cost-recovery charging to cover the costs of regulating processes under integrated pollution control, under local authority air pollution control, and premises subject to regulation under the Radioactive Substances Act 1960 were introduced in April 1991, under the Environmental Protection Act 1990 and the Radioactive Substances Act 1960.

With the agreement of the Treasury, my right hon. Friend the Secretary of State has now made revised charging schemes to introduce the 1992–93 scales of fees and charges, which will take effect from 1 April 1992. I have placed copies of the revised schemes in the Library.

The schemes have been prepared following consultation with industry and other bodies.

The form of the schemes remains the same. For integrated pollution control—IPC—the scheme comprises an application fee to cover the cost of assessment of the operator's proposals and preparation of the authorisation; an annual subsistence charge for holding an authorisation, to cover the costs of inspection and oversight of the plant; and a variation fee to cover the costs of assessment of any proposals for substantial variation to a process.

The application fee for 1992–93 is £2,450 per component for processes which have previously been subject to air pollution control; £3,650 per component for processes coming under regulation by HMIP for the first time. These fees reflect the amount of time and cost involved in the assessment of IPC applications in 1991–92, which has proved to be higher than the estimates on which the 1991–92 fees were based. However, HMIP has set itself the objective for 1992–93 of reducing its average application handling time by 12½ per cent., and the fee levels allow for this efficiency target.

HMIP is publishing extensive technical IPC guidance notes, and is also organising a programme of local seminars for industries currently involved in preparing IPC applications. These steps will ensure that industry has all the necessary information, and will help to achieve speedier authorisation, and reduce application handling further.

The variation fee is £1,200 per component—one third of the application fee.

On 8 November 1991 I announced a further substantial strengthening of HMIP's complement for 1992–93, to ensure that the inspectorate is able to maintain rigorous levels of inspection and oversight, and provide the high degree of public confidence which industry requires to be able to conduct its business. The annual subsistence charge of £1,500 per component reflects the costs of the higher level of oversight which HMIP will be able to provide in 1992–93.

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As noted, the IPC fees for 1991–92 underestimated the time involved in assessing IPC applications, the cost of which was therefore not fully recovered. The legislation governing the charging scheme requires that costs and income are balanced, taking one financial year with another. It is therefore necessary to recoup the under-recovery of costs in 1991–92. However this recoupment will be spread over the remaining four years of the IPC implementation period. It will be carried out by way of an additional charge applied only to authorisations related to applications submitted during 1991–92. The additional charge in 1991–92 will be £410 per component for processes previously under air pollution control, £610 per component for others.

The charges payable on a plant are related to its complexity and scale by being linked to the number of defined components which the plant contains. The schedule of components has been reviewed in consultation with industry, in the light of experience in operating the charging scheme, and revised for 1992–93.

For the longer term, we wish to consider the option of moving to a system of direct charging for IPC applications according to the time and costs incurred in dealing with each application.

For local authority air pollution control, the application fee is increased to £900, and the annual subsistence fee to £550, taking account of the local authority associations' submissions to the Department reporting that local authorities' staff are spending more time than expected in implementing part I of the Environmental Protection Act 1990. The substantial change fee and the fee for processes already registered under the Alkali Act are increased to £580. Fees and charges for small waste oil burners, which reflect a simplified authorisation procedure, remain unchanged at £100.

The form of the radioactive substances regulations—RSA 60—charging scheme also remains the same. Nuclear licensed premises will be billed individually on the basis of regulatory time spent and costs incurred at each site. Non-nuclear premises are charged on the basis of flat-rate fees similar to the IPC scheme, relating to applications, substantial variations, and the subsistence of consents to cover inspection and oversight costs.

For premises authorised to accumulate and dispose of radioactive waste—"band 3 premises", for example, research establishments, major universities—the application and variation fee will be £1,350 and the annual subsistence charge £800. For premises registered to keep and use radioactive material—"band 4 premises", for example industrial users of radioactive sources—the application and variation fee will be £500. The annual subsistence charge will be £80, but this will apply only to holders of larger sources. The majority of registration holders, using smaller closed sources, will not pay any annual subsistence charge, since these sources do not require routine inspection.

As with the IPC scheme, the RSA60 application fees set for 1991–92 underestimated the time involved in assessing applications, and costs were under-recovered. This scheme is also subject to a statutory requirement to balance income and costs. As for the IPC scheme, it has been agreed with the Treasury that the recovery will be spread over four years, through an additional charge applying to 850W consents related to applications made in 1991–92, which will be £210 for band 3 authorisations, and £80 for band 4 registrations.

Charging schemes for Scotland will be made in due course.