Review of charges for air pollution control

A banded charging scheme for processes falling under local authority air pollution control (LAAPC) is being considered by the Department of the Environment (DoE). But a consultant's study for the DoE has cast doubt on the need for any change - and, after finding wide divergences in local authorities' policing practices, has urged the DoE to issue guidance on minimum inspection frequencies.

A two-tier cost-recovery charging system is operated under LAAPC. This is intended to cover local authorities' costs in processing applications for authorisation and other paperwork, and, via an annual "subsistence" fee, in monitoring compliance with authorisations.

Last year, the DoE promised to consider the introduction of banded charges in 1994/5 with the aim of reducing burdens on small operators. This timetable has proved impracticable, and the fees for 1994/5 stick with the existing flat-rate system, increasing roughly in line with inflation (see table ).1Officials now see banded charges as a "possibility" for 1995/6. But the basis for such a move has been called into question by a study conducted for the DoE by KPMG Peat Marwick.

KPMG canvassed a range of trade associations - and found that most had no strong views on banding, though some felt that a simple system might be more equitable. Furthermore, industry did not see the subsistence charge as a major issue.

In contrast, four of the nine local authorities approached commented that the subsistence fee was insufficient to cover their costs. Data on their actual spending was limited, but fell in the range of £580-1,550 per process.

After considering the merits of various types of charging schemes, KPMG concluded that "if banding is to be pursued, a simple three-tier system by process would be most appropriate". Both industry and local authorities generally felt that banding by size of process would not be equitable, because small operators can cause significant pollution problems and be difficult to monitor and oversee.

It also appears that a banded scheme might fall most heavily on some industry sectors which are already facing the greatest difficulties in meeting the costs of upgrading their processes. Councils identified foundries, incinerators, minerals and metal processes as requiring high levels of monitoring. Cement packing and timber processes needed relatively little oversight.

KPMG's main recommendation was that the DoE should issue guidance on appropriate levels of monitoring compliance with authorisations - in particular, on inspection frequencies. None of the DoE's copious guidance on LAAPC addresses this issue at all, and as a result local authorities appear to be adopting widely divergent inspection practices. Even among the small sample scrutinised by KPMG, the frequency of visits ranged from twice a year to monthly, "with one authority indicating that it would only undertake visits if there were complaints or known problems."

The report goes on to raise the question whether the current subsistence fee is adequate to cover local authorities' costs. It suggests that the fee pays for about 24 hours of officer time per process per year, given that the average salary and overhead involved amounts to about £24 per hour.

The report suggests that the fee appears adequate to pay for a number of visits to a process per year - although it does point out that there is insufficient evidence to show whether it would also cover other aspects of "subsistence activity", notably administration, reviewing monitoring data and training. What is not mentioned at all is the idea that councils should be carrying out some monitoring to check operators' own results - or how this should be paid for. This is another issue on which there has been no guidance from the DoE.

The DoE says that it will develop guidance on inspections for local authorities during 1994, but it remains to be seen whether this will cover monitoring effort as well. The DoE is also consulting local authority and industry bodies on the possible basis for a banded charging scheme.

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