Joint Committee on Statutory Instruments Fourteenth Report


APPENDIX 2

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 following point:

"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 of English);

(d)boatmasters' licences (practical examination; oral 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 considerable time.

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 administrative staff.

(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



 
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