Memorandum from the Department for Transport,
Local Government and the Regions
MERCHANT SHIPPING (FEES) (AMENDMENT NO. 2) REGULATIONS
2001 (S.I. 2001/3628)
1. The Committee has requested a memorandum on the
"Explain the reasons for the increase in
fees in relation to the following items-
(a) examination for certificate of competency
(operational and management);
(b) examination for licence as marine engine operator
or senior marine engine operator;
(c) in relation to certificate of equivalent competency,
consideration of applicant's qualifications for issue of certificate;
examination of oral competency (operational; management; and standard
(d)boatmasters' licences (practical examination;
2. The items referred to at (a) to (d) above all
relate to fees charged in connection with the obtaining or verification
of various marine qualifications and it is therefore convenient
to deal with them together.
3. The Maritime and Coastguard Agency's (MCA) Seafarer
Standards Branch is responsible to the Secretary of State for
the processing and analysis of applications leading to admission
to seafarers' examinations and the issue of certificates of competency,
in accordance with the International Convention on Standards of
Training, Certification and Watch-keeping. In carrying out this
function the MCA must satisfy itself that applicants fully meet
the necessary standards before a UK certificate is issued. This
requires comprehensive assessment of the candidate by its highly
qualified and experienced marine surveyors. Such assessment requires
4. The MCA, as an Executive Agency of the Department,
is obliged to give effect to HM Treasury's general policy of full-cost
recovery in relation to its fees and charges.
5. The present fee increases were given effect as
a result of a comprehensive review by the MCA, which is the first
such review undertaken since 1991. The fees in items (a) and (b)
were last fixed by S.I. 1991/784 which came into force on 15 April
1991. Fees in respect of Certificates of Equivalent Competency
(CEC) (item (c)) were introduced in August 1995 (S.I. 1995/1893)
and fees relating to Boatmasters' Licences (item (d)) in June
1993 (S.I. 1993/1340).
6. The MCA's review involved a detailed examination
of the services provided, including a reassessment of the various
activities for which charges are made by reference to such factors
as the time required, staff costs, overheads and other resource
costs. This provided the MCA with a more accurate picture of the
current actual costs involved, enabling it to assess a fair and
reasonable charge to be made for each of the services provided.
The methodology underlying the new charges was subject to an independent
review by the National Audit Office.
7. With regard to the individual increases identified
by the Committee, the Department comments as follows:
(i) Item (a) - examinations for Certificates of Competency
are performed by the MCA's marine surveyors (at an hourly rate
of £74) with administrative assistance from the Seafarers'
Standards Branch (at an hourly rate of approximately £40).
The new fees of £165 and £180 respectively (inclusive
of £20 for the cost of issuing the certificate) are intended
to reflect the combined work undertaken by marine surveyors and
(ii) item (b) - examination for marine engineer operator's
licence - similar considerations apply as for (a) above. However,
the examination is less rigorous and time-consuming, hence an
inclusive charge of £115 is considered appropriate.
(iii) item (c) - consideration of an applicant's
qualifications for issue of a CEC is carried out by administrative
staff in the Seafarers' Standards Branch and normally occupy some
1 - 1½ hours. The fee of £70 (including the cost of
issuing the certificate) is intended to reflect this. Examinations
for CECs are conducted by the MCA's marine surveyors. The fees
are thus expressly related to the hourly rate of £74. The
examination fees reflect 1½ and 1 hours' work in relation
to operational/management and standard of English examinations
respectively. It should be noted that a discrete fee in relation
to "oral competency - standard of English" was introduced
by these Regulations. Oral competency - standard of English was
previously examined under the items relating to oral competency
for deck officers, Class 1 or 2, for which the fee was £84.
The reference to £50 in the Explanatory Note is therefore
erroneous. Accordingly the new fee represents a reduction of £10.
The Department regrets that the Explanatory Note is misleading
in this respect.
(iv) item (d) - examinations for Boatmasters' Licences
- the marine surveyors' hourly rate applies as in the case of
CEC examinations. The new fees therefore reflect one hour's work
in each case.
8. In summary, as a result of the passage of time
since the previous fee increase and a re-assessment of the MCA's
chargeable activities, fees and charges failed to represent full-cost
recovery. The increases in fees and charges were the subject of
review and consultation with the industry. They represent a fair
and proportionate increase.
7th December 2001