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

Alan Whitehead Excerpts

Tuesday 24th May 2022 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The statutory instrument before us is about as non-controversial as it gets. There has clearly been a regime in place previously relating to OPRED’S activities and fees. As the Minister elucidated in response to the question of the hon. Member for Kilmarnock and Loudoun, OPRED has a regime whereby the total back office costs of the activities related to its inspections and so on are calculated and categorised into the number of hours for which the activity is undertaken and what is cost-recoverable. The level of fees are then determined by the whole calculation together.

The distinction between the specialist officers and the non-specialist officers is that the first are the technical staff who carry out the relevant functions of the Secretary of State and the latter are the administrative staff who back up that work. The average number of hours per annum spent on potentially cost-recoverable activities is suggested to be 1,243. The total amount recovered by OPRED appears to be about the same under the new arrangements—the marginal increase in rates for specialist officers compared with the marginal decrease in rates for non-specialist officers—as the average recovered from industry in previous years, and that figure is £6.2 million.

The problem with all this is that the figures that have been provided by the Minister—for hours, and previous and present costs—do not add up to £6.2 million. Indeed, they add up to substantially less. Either my calculations are badly out or there is a missing money problem, concerning the total amount recovered by OPRED and the mechanism for recovery that is set out in the explanatory memorandum, as the Minister said.

I invite hon. Members to get out the calculators on their mobile phones—to do rather better business with their mobile phones than perhaps some hon. Members are doing at the moment—and just to multiply one number by the other. If they do so, they will see that the two sums do not add up. I wonder what the explanation is. I do not think that any inspiration is likely to come to the Minister this afternoon, so unless he has an explanation right now, perhaps he could write to me on the matter.

I am happy that the instrument is not controversial, but I think we ought to know what is in the total sum recovered by OPRED per annum, so that we can be sure that what is being recovered from industry is a proper representation of the work that is undertaken and the detailed rationale that is set out in the explanatory memorandum. Other than that, the Opposition have no intention of pushing the SI to a vote and are happy to see it pass, subject to that bit of information coming my way.

--- Later in debate ---

[Paul Scully]

I am glad to hear that overall I have provided the necessary assurances for the Committee to approve the statutory instrument, but I appreciate the valid questions that have been asked.

OPRED’s accrued income is about £6.2 million per year, as the hon. Member for Southampton, Test said. The majority is charged to the offshore sector, with less than £100,000 charged to the North Sea Transition Authority, which is largely for the provision of advice related to licence transfers, and the appointment of operators and monitoring compliance with an offshore licensee’s obligations to make adequate provision to cover potential environmental damage liabilities deriving from their operations.

OPRED bills about 120 companies and the NSTA on a quarterly basis, but the fees are determined by adding together the number of hours worked by specialists and non-specialists on cost-recoverable activities multiplied by the applicable hourly rates. That is the chargeable amount, but there is something like £10 million of overall running costs for OPRED’s environmental operations unit, including the cost of the office in Aberdeen and corporate support supplied from London. The recovery is 65% of those costs.

[Dr Whitehead]

Does the Minister accept that it looks like there are a number of other recoverable costs liable to OPRED that have not been mentioned this afternoon? It would be helpful to know what those costs are.

[Paul Scully]

I will write to the hon. Gentleman about the costs and to the hon. Member for Kilmarnock and Loudoun about the qualifications. OPRED’s operating costs are more than £6.2 million—about £10 million—but the recoverable costs have been established in previous years. The amendment is just a recalibration of the hourly rates according to the annual uprating, and indeed downrating for the non-specialists, as they relate to the administrative costs around the hourly rate that the individuals get themselves. I hope the hon. Member for Southampton, Test will accept my explanation if I provide more detail in writing.

[Dr Whitehead]

indicated assent.

[Paul Scully]

The regulations will enable OPRED to recover the costs, which we do not want to pass on to the taxpayer. I therefore commend them to the Committee.

Question put and agreed to.