Proposed Charging Scheme
Martin Marsden, Water Unit Manager,
SEPA
General introduction
This note covers two different
aspects of charging. Firstly it considers the regulations
and their implications.
Secondly it describes the process which SEPA
plans for the delivery of the charging scheme.
The Regulations
The Policy Memorandum which accompanied
the WEWSA stated that powers will be provided for
regulators to recover the costs incurred by undertaking its
functions in relation to the water environment. The
Regulations confirm that the charging scheme will be based
upon
charges upon authorisations (registrations, general
binding rules, and licences). The most significant
aspect of a charging scheme will be the subsistence charge.
This annual charge supports the delivery of
SEPA's functions.
The other types of charges (covering
applications, reviews, revocations) recover the costs of a
particular activity.
Importantly the Regulations allow for different
charges for difference aspects of an authorisation. So
for example if a registration for abstraction and a
licence for discharge were combined into a "single
water use licence", the charges would reflect the
different levels of control required.
The Regulations also identify some key principles
upon which the charging scheme should be based.
· taking account of the principle of recovery of costs,
including environmental and resource costs, having regard
to the polluter pays principle; taking account of the principle of recovery of costs,
including environmental and resource costs, having regard
to the polluter pays principle;
· providing an incentive for users to use water
resources efficiently; providing an incentive for users to use water
resources efficiently;
· ensuring an adequate contribution from water users
disaggregated into appropriate categories, including at
least: industry, households and agriculture; and ensuring an adequate contribution from water users
disaggregated into appropriate categories, including at
least: industry, households and agriculture; and
· having regard to the social, environmental and
economic effects of cost recovery and the geographical and
climatic conditions of the areas affected by the carrying
on of controlled activities. having regard to the social, environmental and
economic effects of cost recovery and the geographical and
climatic conditions of the areas affected by the carrying
on of controlled activities.
All these statements reflect aspects of the Water
Framework Directive. However, most importantly,
they ensure that the costs of the charging scheme are
focused on activities which pose an environment risk and
promote sustainable water use.
SEPA's plans
The WEWS Act charging scheme will be SEPA's most
important charging scheme. At present the Control of
Pollution Act scheme recovers £11m from over 8,600 point
source discharges. SEPA actually spends £26m on
protecting and improving the water environment which
represents the largest component of SEPA's work.
The Environment Agency charges £100m for their
abstraction control regime. SEPA is a tenth the
size of the Environment Agency which suggests that an
equivalent Scottish charge for abstraction control could be
up to £10m.
So how much will the WEWS Act charges amount to by
2012 -15? We do expect them to be lower than the EA
equivalent for the following reasons.
· All the regimes will follow the same regulatory model
(of registrations, GBRs and licences), thus allowing their
efficient administration. All the regimes will follow the same regulatory model
(of registrations, GBRs and licences), thus allowing their
efficient administration.
· The regulations promote a strongly risk focused
approach to regulation which will focus regulatory efforts
towards activities which represent a serious risk of
environmental harm. The regulations promote a strongly risk focused
approach to regulation which will focus regulatory efforts
towards activities which represent a serious risk of
environmental harm.
· SEPA is intending to develop an integrated approach
to applying the regimes and monitoring the environmental
impacts. SEPA is intending to develop an integrated approach
to applying the regimes and monitoring the environmental
impacts. This contrasts to the separate functions
in the EA covering water resources and water quality.
SEPA's provisional estimates are that the costs of
moving from one to five regulatory regimes could lead to
costs nearly doubling from £26m to £40m. However,
work is now underway to calculate the costs and to profile
the costs over the next six years.
It should be stressed that the number of water users
subject to charges will also increase. Provisional
estimates suggest that the number of water use activities
could increase by between two and three fold (from 8,600 to
over 20,000).
SEPA's current working assumption is that it
will not impose annual subsistence charges on the 80,000
water use activities that it expects to be covered by
registrations.
This is because the costs of recovering
small charges from very large numbers of water users would
be disproportionate.
SEPA and the SE recognise that the development of the
charging scheme is a matter of serious concern to water
users. We therefore make the following
commitments.
- The papers used to develop the charging
scheme will be made available to a stakeholder
group.
- SEPA will fund an independent audit of the
basis of the charging scheme and this auditor will
report to the stakeholder group.
- SEPA will provide an indication of charges by
May 2004 and a provisional profile of charges up to
2009.
Do the regulations provide the appropriate
framework for the new charging scheme?
What are stakeholders' key concerns over the
development of the charging scheme?
Does the participatory approach to the
development of the charging scheme provide a mechanism
of addressing these concerns?