FSA refunds minima charges

The Food Standards Agency (FSA) has confirmed it is set to refund industry to the tune of approximately £1.14m, following a judicial review.

The payment, to be made in two stages, with the first payment of £380,000 made last week (15 March), came about after the FSA was challenged in the courts by 12 members of the Association of Independent Meat Suppliers (AIMS) over issues surrounding the recovery of EU minima charges. AIMS decided to take action over the FSA’s charging regulations, which they claimed were “defective”, and took issue with the fact that the exchange rate the agency used to calculate the minima charges for 2010/11 was based on the average exchange rate for 2009.

A settlement in the high court saw a consent order agreed, which will see the FSA refund £380,000 for the 2010/11 financial year, and approximately £760,000 for the 2011/12 financial year.

A spokesman for the FSA said: “The FSA will be meeting the requirements of the consent order, which means issuing refunds to plants. These total around £380,000 in GB for the ’10/11 financial year.

“The picture for the ’11/12 financial year is complex. The FSA cannot determine the exact application of the EU minima at individual plant level until after the financial year ends this month. However, the terms of the consent order mean that the FSA will issue refunds for ’11/12 this week, even though those plants may have a shortfall against the EU minima at the end of the financial year.

“The refunds for ’11/12 will total approximately £760,000. However, the FSA is making it clear to those plants that invoices will be issued in April, which are likely to exceed the credit they received for ’11/12.”

Norman Bagley, director with AIMS, said: “The refunds were part of a bigger picture. The FSA’s attempt to bring in time-based charging, before it had negotiated risk-based controls in Brussels, is proving to be an absolute disaster. It was supposed to drive efficiency, but it is having the exact opposite effect.
“It would have been better to have retained the previous system of charging actual costs, subject to a maximum headage charge. It would have been simpler to administer and would have provided an incentive for the FSA to become more efficient. The current controls do not provide value for money and the FSA must accept that it is sharing an unnecessary cost, not subsidising the industry. It should sit down with the industry and thrash out a charging policy that is fair for all, rather than solely being aimed at maximising FSA revenue.”

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