Draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2022

Alan Brown Excerpts

Tuesday 24th May 2022 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I beg to move,

That the Committee has considered the draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2022.

It is a pleasure to serve under your chairmanship, Ms Bardell.

The draft regulations were laid before the House on 25 April. As the environmental regulator of the offshore oil and gas sector, which I will refer to as the offshore sector, the Department for Business, Energy and Industrial Strategy’s Offshore Petroleum Regulator for Environment and Decommissioning—snappily abbreviated to OPRED—recoups the costs of its regulatory functions from the offshore sector rather than the taxpayer.

OPRED minimises the impact of the offshore sector on the environment by controlling air emissions and discharges to sea, and minimising disturbance over the lifecycle of operations, from seismic surveys through to post-decommissioning monitoring. Its recoverable costs are covered in two ways: in regulations covered by the fees regulations; and by five fee schemes that do not require legislative change and which will be amended administratively.

OPRED’s average annual fees income is £6.2 million, which is recovered from about 120 companies. It recovers its costs via fees based on hourly rates. The fees that OPRED charges are currently based on hourly rates of £197 for environmental specialists and £108 for non-specialists. Specialists are technical staff who carry out the functions of the Secretary of State, and non-specialists are support staff. The current hourly rates have been in force since June 2021. OPRED reviewed the cost base and concluded that the existing hourly rates needed to be revised to reflect the present costs to OPRED for providing regulatory services.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Will the Minister provide a bit more detail about the qualification level of environmental specialists that merits their high rate, and the qualifications of non-specialist support staff, given that their rate is still very substantial at £104 an hour?

[Paul Scully]

The headline figure is less to do with personal specialisms, and more to do with admin and back office specialisms. Support staff obviously have a different point of view from the specialists looking at the exact decommissioning services that OPRED tackles.

The draft regulations will amend the charging provisions by increasing the existing hourly rates for environmental specialists to £201 and decreasing the hourly rate for non-specialists to £104; that reflects the administrative whole, rather than the individuals themselves. The fees are determined by adding together the hours worked by specialists and non-specialists on cost-recoverable activities, multiplied by the hourly rates. The new hourly rates were approved by the Treasury in March and were calculated in line with the Treasury’s “Managing public money” guidance. They cover the expenditure on all resources used by OPRED to support its activities—for example, staff salaries, accommodation, IT and legal services.

OPRED’s costs-recoverable functions include, for example: the evaluation of applications and issuing of consents for seismic surveys, and conducting assessments of the likely environmental effects of proposed projects; assessing operators’ oil pollution emergency plans; and compliance monitoring through inspections. The payable fees will be revised by small amount to enable OPRED to recover its eligible costs. OPRED’s fees regime guidance will be revised to reflect the new hourly rates. OPRED informed the offshore sector of the planned revisions to the hourly rates, and no representations were received.

The revisions to the hourly rates introduced by the regulations will allow operators to recover the costs of providing regulatory services from those who benefit from them, rather than the costs being passed on to the taxpayer. I hope that hon. Members will support the regulations, which I commend to the Committee.

--- Later in debate ---

[Alan Brown]

It is a pleasure to serve under your chairmanship, Ms Bardell.

I will not delay the instrument much longer and will certainly not vote against it, because as the shadow Minister—the hon. Member for Southampton, Test—said, it is pretty non-controversial. I just wonder whether the Minister will provide a wee bit more information on the different duties and qualifications of specialist and non-specialist staff. Paragraph 7.4 of the explanatory memorandum mentions that the number of hours worked in recoverable duties is 1,243, which is less than one full-time equivalent person, so will he provide some more information on staffing levels?