Environment, Food and Rural Affairs CommitteeSupplementary written evidence submitted by the Food Standards Agency

Introduction

The Food Standards Agency (FSA) gave further evidence on the contamination of beef products with horse and pig DNA at the Environment, Food and Rural Affairs Committee on 14 May 2013. Further to the enquiry, and the written statement the FSA submitted on 7 May, the FSA is providing further information in response to questions raised by the Select Committee at the evidence session and subsequent questions raised.

Questions Raised at the Evidence Session

Q1. The FSA agreed to explain the figures on Page 19 of their annual report in relation to the number of prosecutions.

The FSA investigates and prosecutes on its own behalf in relation to alleged breaches of food hygiene and food safety legislation at approved premises (primarily slaughterhouses and other meat plants) in England and Wales. It also investigates alleged breaches of animal welfare, animal by-products and Bovine spongiform encephalopathy (BSE) testing requirements in England on behalf of the Department for Environment, Food and Rural Affairs (Defra). Investigation reports in such cases are now referred to the Crown Prosecution Service who prosecute on behalf of Defra. Investigations into alleged offences, under all legislation at approved premises in Scotland, are referred to the relevant Procurator Fiscal’s office.

During 201112, 17 cases investigated by the FSA, and which had resulted in the initiation of prosecution action by FSA, Defra or Procurators Fiscal, were concluded. A number of the cases were comprised of more than one investigation referral, with individual referrals being made for separate alleged regulatory breaches. In total, 46 separate referrals were covered in the 17 prosecutions and a total of 174 individual charges were laid against companies and individuals.

Of the 17 cases, 14 resulted in convictions.

Q2. Confirmation of what consultancy fees in report were for.

Consultancy spend in 201112 was £76,000 relating to eleven suppliers with the greatest spend by one supplier being £38,000.

The following payments were made:

Deloitte LLP for actuarial work (£38,000)

Socitm Consulting Ltd for professional advice re tender for outsourcing IT function (£17,000)

Midland Software—consultancy re payroll software (£5,000)

London Pensions Fund Authority for actuarial advice (£3,000)

Xpert HR—professional advice line and content licences (£3,000)

Other non-material payments (£10,000)

Total : (£76,000)

Q3. The Committee would like to find out from the relevant Environmental Health Officer why the consignment of meat being stored by Mr Fairbairn was held for five months before being tested for horse DNA. Could you either, a) obtain a response from the relevant EHO, or b) send me the contact details to follow up.

Response: The consignment of meat stored in Freeza Meats Ltd was detained in September 2012 by Environmental Health officials from Newry and Mourne District Council because of queries over the provenance of the product. The FSA worked closely with the District Council throughout the investigation. The FSA requested information from the Polish authorities regarding the consignment’s provenance and from Local Authorities in Hull and Haringey regarding the traceability of the consignment once it left Poland. It is not unusual for these investigations to take several months. A decision was made that the product would be removed from the food chain due to the traceability and labelling issues just before Christmas. There was a subsequent delay in the disposal of the consignment because further clarification was required as to the ownership of the consignment of meat.

That the consignment contained horse meat was not apparent until after the publication of the Food Safety Authority of Ireland’s (FSAI’s) authenticity survey in January 2013. Following publication of the results, the FSA ascertained that the product stored in Freeza Meats Ltd was imported from the same Polish source involved in the FSAI’s survey. Speciation testing was therefore conducted on the consignment and on 4 February 2013, the FSA received results that two of the twelve samples taken tested positive for equine DNA at levels between 60% and 100%. The FSA cannot comment further so as not to jeopardise any potential enforcement action or legal proceedings.

Follow-Up Questions

Staff Numbers

Q4. Can FSA operate satisfactorily with staff reductions of 5.5% in 201112?

Response: In the Spending Review 2010 settlement letter, the FSA committed to meeting its spend reductions without impacting on front line delivery. This obligation has been met, and FSA will be able to meet its front line services in 20132014 and 20142015 within its settlement

Q5. How are staff and budget cuts in local government affecting the delivery of your objectives?

Response: Local Authority budget cuts are resulting in a changing landscape for the delivery of food legislation. Enforcement officers are working hard to protect their services and are looking at innovative solutions to continue to provide effective controls through for example shared services and regional coordination, and more effective targeting of resources. There has been concern that local authorities are losing experienced and knowledgeable staff and the FSA continue to maintain a full programme of training and guidance, to ensure that enforcement officers are effective and provide consistent delivery of controls and sanctions. It is also important that the FSA continues to coordinate a grant funded national programme of sampling and surveillance, to get better information, and to encourage local authorities to provide intelligence about issues that may affect more than just their local area. This can help us better target enforcement work and make the best use of resources. Local Authorities have welcomed this stronger leadership role for the FSA. However, there have been reductions in the numbers of Local Authority officers working in the areas covered by the FSA. Although the profile of interventions by Local Authority officers has changed, overall compliance in food hygiene levels has continued to improve. In the area of food standards, reductions have been seen in all areas of activity and the numbers of officers deployed in the area of food standards and animal feed have fallen more sharply. Food standards enforcement action, however, rose in the last full reporting year, suggesting an increased focus on targeted interventions.

Recovery of Costs

Q6. In 2009 that the FSA Board noted the expectation to recover costs fully, yet in 1011 and 1112 you have languished around the 50% mark. Why is this?

Q7. There appears to have been very little progress between 10/11 and 11/12. What steps are being taken to address the shortfall in cost recovery from industry?

Q8. Your objective does not give a timeframe for achieving full cost recovery. How long do you expect it to take before you are fully recovering your costs?

Combined Response: Following the decision by Ministers in 2009 not to agree to the proposed increase in charges for meat official controls the FSA Board reviewed the policy on charging for meat official controls, and the principles agreed by the FSA Board in November 2009, and confirmed at their meeting in May 2011, that:

It is not a function of the FSA to subsidise industry and if a continuing subsidy is to be paid it should come from elsewhere;

Providing the best possible protection for consumers from food risk should not be based on economic circumstances or the ability of an industry to pay;

The FSA should consult with industry and government stakeholders on proposals for implementing the Board’s decision to recover full costs for meat official controls.

The FSA undertook a full public consultation, from 10 November 2010 to 1 February 2011, detailing proposals for future charging arrangements for meat official controls, which included a move to full cost recovery by removal of current discounts, with options for a phased introduction and lower charges for low throughput businesses. A number of stakeholder meetings were held during the period of the consultation.

At their meeting on 25 May 2011 the FSA Board considered a package of evidence, including stakeholder comments made in response to the formal consultation and during numerous events and meetings, and agreed that:

Full cost recovery should be introduced over a three-year period, beginning in April 2012.

The consultation proposals should be amended to allow more small businesses to be included in the “low throughput” category. The revised proposals meant that these meat plants would pay reduced charges in a tiered system, depending on the volume of livestock units or meat they process. For the first 1,000 livestock units processed, the reduction would be a maximum of 70% of the full cost charge. The next 1,000 would be subject to a 50% reduction. The next 3,000 would be subject to a 25% reduction. For meat plants processing more than 5,000 livestock units per year full cost charges would apply with no discount for any of the throughput.

This would have provided increased support for approximately 500 establishments, as opposed to about 420 establishments as originally proposed.

The FSA estimated that removing the discount would have resulted in cost increases to the GB meat industry of approximately £16.8 million. This is against a UK meat market (excluding game) worth about £6.34 billion to the UK economy.

A detailed Impact Assessment was prepared by the FSA. The FSA Chair discussed the Board’s decision with Ministers in all four countries of the UK. The final Impact Assessment was sent to the Regulatory Policy Committee (RPC) and the FSA received an amber response. The proposals and impact analysis were sent to the Reducing Regulation Committee (RRC). However in April 2012 the RRC rejected the FSA’s charging proposals.

The FSA’s key objective is to deliver the best possible public protection for consumers and it does not consider that providing this should be based on economic circumstances or the ability of industry to pay. The FSA Board is clear that it is not the function of the FSA to subsidise the industry which it regulates. However, the FSA does not wish to place an undue burden on business and has itself achieved significant efficiencies in the delivery of meat official controls.

The FSA has reduced the cost of official controls delivered to the meat industry in GB from £56.4 million in 201011 to £50.2 in 201112 while over the same period operational staffing has been maintained at a relatively stable level (1,135 full time equivalents in 201011 and 1,115 in 201112).

At its meeting on 12 September 2012 the FSA Board reconsidered the Agency’s position on charging and agreed that:

The FSA’s priority in relation to charging policy is to protect the interests of consumers.

That the FSA should pursue a more collaborative approach with stakeholders interested in these issues, working in partnership to deliver shared outcomes.

That priority should be given to building a more consensual approach to progressing three issues:

A review of the current discount system making recommendations on how to reform the system to address anomalies.

Joint working to identify further ways to reduce costs while continuing to deliver effective consumer protection, building on the outcomes of an efficiency review.

Exploring with stakeholders the options for alternative delivery models, including through the use of a control body.

An external efficiency review of the delivery of UK meat official controls and support functions should be carried out

Discussions should continue with other Government departments on their appetite for taking on responsibility for allocating any ongoing subsidy

The FSA has commissioned the National Audit Office to undertake an efficiency review on the delivery of official controls in meat premises, to help identify any further areas where efficiency savings could be implemented without loss of consumer protection or infraction of EU regulations. The results of this report are scheduled to be discussed at the FSA Board meeting in July 2013. Once the outcomes and recommendation have been considered and evaluated by the executive and Board a programme will be implemented to deliver any further efficiencies. This will also be an opportunity to review the future policy on full cost recovery.

FSA Review

Q9. Was the review of the FSA requested by the Government or was it the Board’s idea? What are the terms of reference for the Review?

Response: The FSA Board was asked by the FSA Executive, at its Open Board meeting on 14 April, to decide whether to commission a review of the FSA response to the incidents of adulteration of comminuted beef products with horse and pig meat and DNA. The Board agreed to proceed and agreed the terms of reference.

The terms of reference for the review are attached in the Annex.

Q10. You have appointed a Health Expert to lead the review. How will you ensure that concerns about food authenticity and other non-health related aspects of your remit are given sufficient attention in the review?

Response: The review is focused on issues relating to incident management, the disciplines of which relate equally to authenticity and safety issues. Professor Troop is taking evidence from a wide range of stakeholders, including industry and consumer groups, and the FSA Board will consider the full report with a clear focus on authenticity as well as potential learnings from a health perspective.

May 2013