Draft Public Bodies (Marine Management Organisation) (Fees) Order 2014
The Committee consisted of the following Members:
† Baker, Steve (Wycombe) (Con)
† Barclay, Stephen (North East Cambridgeshire) (Con)
Blunkett, Mr David (Sheffield, Brightside and Hillsborough) (Lab)
Clwyd, Ann (Cynon Valley) (Lab)
† Crouch, Tracey (Chatham and Aylesford) (Con)
† Eustice, George (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
† Flynn, Paul (Newport West) (Lab)
† Hendrick, Mark (Preston) (Lab/Co-op)
† Horwood, Martin (Cheltenham) (LD)
† Norman, Jesse (Hereford and South Herefordshire) (Con)
Paisley, Ian (North Antrim) (DUP)
† Penrose, John (Lord Commissioner of Her Majesty's Treasury)
† Phillipson, Bridget (Houghton and Sunderland South) (Lab)
† Smith, Angela (Penistone and Stocksbridge) (Lab)
† Walker, Mr Robin (Worcester) (Con)
Watson, Mr Tom (West Bromwich East) (Lab)
† Wiggin, Bill (North Herefordshire) (Con)
† Williams, Roger (Brecon and Radnorshire) (LD)
Helen Wood, Committee Clerk
† attended the Committee
First Delegated Legislation Committee
Tuesday 2 September 2014
[Andrew Rosindell in the Chair]
Draft Public Bodies (Marine Management Organisation) (Fees) Order 2014
8.55 am
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice): I beg to move,
That the Committee has considered the draft Public Bodies (Marine Management Organisation) (Fees) Order 2014.
Section 4 of the Public Bodies Act 2011 enables Ministers to make an order modifying the funding arrangements of certain public bodies, including the Marine Management Organisation. This order will allow the MMO to charge for the monitoring, varying and transfer of marine licences.
The MMO is the principal regulator of marine activities around England. It was created by the Marine and Coastal Access Act 2009 and its mission is to enable sustainable growth in our marine area, facilitating growth in coastal communities, while protecting and enhancing the marine environment. Its responsibilities include the operation, on behalf of the Secretary of State, of the marine licensing system in English waters and the offshore waters of Wales and Northern Ireland. Part 4 of the Marine and Coastal Access Act created the new streamlined marine licensing system for most UK waters, which replaced the previous licensing system, established under the Food and Environment Protection Act 1985. Developments subject to a marine licence can range from small projects, such as the installation of buoys or the construction of small jetties, to larger harbour, dredging or wind farm developments.
It is Government policy to recover licensing costs where practicable. The Marine and Coastal Access Act and regulations made under it allow for the recovery of most of the costs associated with marine licensing. However, the powers in the 2009 Act do not allow for the recovery of all the costs associated with the monitoring, varying and transfer of licences. These costs were recoverable under the previous licensing regime, and I understand that it was not the intention to omit them from the Marine and Coastal Access Act. As a consequence, it was not possible to include such charges in the new fee regulations, which we made last April.
The proposed order, made under the Public Bodies Act 2011, is designed to remedy that omission. The order specifies that the MMO may charge a fee in relation to the monitoring of an activity authorised by a marine licence; the variation of an existing licence; and the transfer and variation of a licence from the licensee to another person. The order specifies the level of fees that may be charged. The basic principle is to charge applicants for the hours worked on a case, with the hourly rate fixed at £94. However, maximum ceilings will apply to simple variations or transfers, or the
monitoring of non-complex cases. This is intended to provide greater certainty for smaller businesses and other operators.A different formula will apply in relation to the monitoring of disposal sites for dredged material. In these cases, the fee is calculated on a per tonne basis, up to a maximum of £15,000. This is because disposal sites are typically used by more than one operator and the MMO needs a method for apportioning the monitoring costs involved. Once in force, the order is expected to increase the MMO’s income from marine licensing by approximately £600,000 per annum. In the context of the MMO’s budget of around £28 million, it will make an important difference.
The Government have consulted on these proposals. As explained in the explanatory document accompanying the order, most respondents agreed with the overall principle and need to recover costs. However, there were inevitably some concerns about the potential burden on business and the importance of transparency and consistency in charging. I am very mindful of those concerns. I would like to point out that over the last few years we and the MMO have worked hard to remove unnecessary regulation and make the system work as efficiently as possible. This has included exempting low-risk activities, the use of long-term licences for activities such as dredging and disposal, fast-track licensing for simple, straightforward applications and the introduction of a coastal concordat to better co-ordinate the consenting process for coastal developments in England.
No issues have been raised with regard to the order by the relevant departmental Select Committee. In its consideration of the order, the Secondary Legislation Scrutiny Committee agreed with the Government that in the longer term it is desirable to rectify the deficiency in charging powers with an amendment to the Marine and Coastal Access Act. I can confirm that we will continue to look for a suitable opportunity to do so.
In summary, the Government consider that the approach set out in the order provides a fair means of charging and is consistent with our objective of full cost recovery. I therefore commend the order to the Committee.
9 am
Angela Smith (Penistone and Stocksbridge) (Lab): It is a pleasure, Mr Rosindell, to serve under your chairmanship.
I thank the Minister for his explanation of the order, and I wish to make it clear at the outset that we do not oppose it. As he will be aware, the Marine Management Organisation is a relatively new body set up by the last Labour Government under the Marine and Coastal Access Act. As he explained, the draft order proposes to extend the ability of the MMO to recover the costs it incurs in dealing with licence applications under part 4 of the Act. The licences regulate marine activities in the seas around England and Wales so that they are carried out in a sustainable way, as the Minister explained.
The purpose of the order is to move towards full cost recovery under the Marine and Coastal Access Act. At present, the monitoring of sites where licensable activity is taking place costs the MMO about £300,000 per annum. The review of monitoring reports required from licence holders for surveys of sea-floor deposits costs about £150,000 per annum and the varying of
existing licences—for example, a change of vessel name on an issued licence or another significant variation—costs the MMO about £224,000 per annum. It is right that those costs should be paid for by industry and are not a burden on the public purse.Regrettably—and we should be clear in admitting this—under the charging powers of the Marine and Coastal Access Act, monitoring costs, especially for dredging, are still not fully recoverable. We accept that the MMO has undertaken a review of its activities and moved quickly to reduce unnecessary burdens and costs on businesses and other marine users, which is something we welcome, along with the MMO, as the number of exempt activities and the use of longer licences have increased. Further improvements should be encouraged through the MMO stakeholder forum group, along with the use of customer satisfaction surveys and key performance indicators. During the consultation on the proposal to extend the MMO’s ability to recover costs, most respondents agreed with the overall principle. However, the consultation noted that respondents’ main issues of concern related to the overall level of fees for marine licensing and the impact on smaller businesses. Can the Minister give us further assurances that these concerns have been considered, and that they will continue to be acted upon?
I should also like clarification and assurances on marine conservation zones. The creation of MCZs is of course something on which the last Labour Government legislated, but we are concerned that we are falling behind in the schedule for establishing new zones, and I should like assurances that the changes we are considering do not adversely affect the establishment of further MCZs. What assessment has been made of whether the move to full cost recovery will have an impact on the delivery of the zones?
I began by welcoming the measure, which will grant the MMO further powers, allowing it to move towards a more financially sustainable model of delivery and away from taxpayers subsidising marine licence applicants. However, I should like to conclude by asking just one further question about the regulations for fee ceilings, which limit the cost of smaller-scale projects for small businesses. The assumption is that the loss met by the public subsidy will have a cap attached. If so, can the Minister advise the Committee as to the proposed level for the cap and how it will work?
With those assurances, we on this side of the Committee are content to support the draft order.
9.5 am
George Eustice: I am delighted that there is a consensus across the Committee to support the draft order. As I said, the Government are committed to achieving a sustainable marine economy, which means, among other things, having an effective system for managing the activities taking place in our seas.
I will try to deal with the several points raised by the shadow Minister. She highlighted some of the concerns, to which I alluded earlier, raised by small businesses
about the potential burden of additional fees. I am mindful of those concerns and we must not allow the order to become an excuse for the MMO to undertake unnecessary monitoring. Some concern was expressed about onerous monitoring that goes beyond what is required, particularly when it comes to dredging. We will ensure that does not happen. An appeals system will be put in place for firms that are concerned about monitoring requirements.The shadow Minister also mentioned caps. A series of caps are set down for simple amendments—for example, £50 for a change to the name on the licence where no consultation is required. On other, slightly more complicated amendments, such as a transfer of licence, the fee will be capped at £200. The big item here is the cost of monitoring and evaluation when it comes to dredging applications. Some three quarters of the savings we are making will relate to such applications. The charge will be applied on a tonnage rate of one penny per tonne, with a cap at £15,000 for large applications.
I am satisfied that the caps are quite generous and will prevent fees from running away. I completely agree, however, that we must constantly seek to improve and refine the licensing system. We have already introduced longer-term licences for big applications and created exemptions for small, trivial applications. I am also keen that we remove duplication. Where the Health and Safety Executive or a local authority has already assessed a particular activity and has deemed it to be suitable, that ought to fast-track the application for that activity to avoid replicating the process, so I agree with the shadow Minister on that.
Finally, the shadow Minister asked about marine conservation zones. As she will know, we announced the first tranche of 27 MCZs last November. I can confirm that an informal consultation is under way with stakeholders on an initial 37 candidate sites. This summer the Centre for Environment, Fisheries and Aquaculture Science has been undertaking further research work to consider the evidence base for those 37 sites. As the shadow Minister will know, the Government’s intention is to hold a formal consultation on a shortlist taken from those sites in the new year. A third tranche will follow in 2016. I am confident that the process is on course and can confirm that the changes will have no impact on the MMO’s ability to carry out its work, which is funded from its core grant and is a key priority.
In conclusion, I am glad that we have a consensus. The proposal in the order is a fair way to proceed. It is consistent with the Government’s policy of aiming for full cost recovery and rectifies an anomaly in the original drafting of the Marine and Coastal Access Act 2009. I am pleased that we have considered the matter today and thank hon. Members for turning up at this early hour.