Fees for tests and inspections of heavy goods and public service vehicles

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Purpose and Intended Effect of the Measures

Issue

Theme for the year from April 2002 onwards is to enhance a major part of the Inspectorate's core work, namely the annual tests of heavy goods and public service vehicles. We are also planning more educational and advisory activities. A proportion of the increase in test etc fees proposed is required to fund those changes, with the rest used to meet inflationary costs.

Objectives

The purpose of the increase is to ensure that the cost of providing a test service for heavy vehicles is matched by the income from fees and charges. It is also to help fund a number of developments including the introduction of changes to the heavy goods vehicle test covering the setting of speed limiters; revised conditions of approval etc for designated premises; new customer measures. We will also continue the development of our own sites

Risks

If increases in fees and charges cannot be made, the risk is that the Inspectorate's plans for improvements to its services, long term sustainable development and implementation of changes to the test will fall by the wayside because of a failure to secure sufficient funds. If this were to occur, the UK would not be able to meet its obligations to implement a change to the EC Roadworthiness Directive and the DTLR would be at risk of infraction proceedings, combined with a loss of credibility. Failure to introduce the check of the setting of speed limiters would deny law-abiding Operators a more level playing field. The credibility of the Inspectorate would also suffer. Some of the initiatives required to tackle the issues raised by those attending the Testing Away Day (for example the introduction of visits to operators) would not be implemented. There is a small risk that higher fees will tempt operators to skip the annual test. But the link between the test certificate and the payment of excise duty means that operators will not want to take the chance of being caught without a valid vehicle excise duty disc for the sake of a couple of pounds.

Options

The only viable alternative to an increase in fees and supplements is to reduce the content of the annual test and the specialist inspections, which will enable the programme of service and other improvements to go ahead within the fees and supplements at their current levels. However, most of what the Inspectorate does is necessary to comply with the domestic, European and International legislation and agreements. For example, VI is responsible for implementation of the EU Roadworthiness Directive and the TIR Convention, measures that are designed to enhance levels of road safety and environmental protection, and to remove barriers to trade and facilitate movement of goods across national boundaries.

Efficiency Savings

VI will incur additional expenditure during 2002/03 because of:

  • Higher costs in areas such as staff, accommodation (commercial rates, utility bills), computing, estates and equipment maintenance
  • The introduction of additional items in the test for heavy vehicles, namely:
    • Speed limiters (almost all hgvs > 7.5 tonnes & many coaches)
    • Disabled access features (on about 2,300 buses & coaches)
    • Tachograph head seals and plaques (on almost all hgvs, some buses and most coaches)
  • Changes to the capacity threshold from 16 to 22 passengers where the payment of the higher fee for large buses and coaches is required, so that some operators pay a lower fee
  • Removal of the fee for the inspection of a bus or coach where additional seat belts have been installed, so that some operators pay nothing to have the belt installation checked
  • The continuation of the underlying business trend towards higher numbers of larger vehicles that take longer to test.

The extra items in the test for many heavy goods vehicles will extend the test by an average of 5 minutes, made up of 4 minutes for the speed limiter check and about a minute for the check of seals and plaques in the tachograph head. The check of coaches fitted with a speed limiter will also take about 4 minutes longer. The check of a bus or coach built to the disabled access requirements will be increased by about 15 minutes.

The total cost of the additional expenditure is equivalent to an average rise of about 10% in the fee for a heavy goods vehicle or about 6% in the fee for a trailer, bus or coach. Efficiency savings mean that the increases in fees have been held to 5% and 3% respectively. The savings are inline with the best practices in industry and the Inspectorate will continue to seek further efficiency gains during the year to maintain control over costs. The Inspectorate will also maintain its policy of matching costs to expenditure and only to seek rises in fees to the absolute minimum.

Benefits

The planned benefits of the test fee etc increases are all set out above.

Issues of Equity or Fairness

The proposed measure would impact proportionally across all operators whatever their size or vehicle type. The fees are set in way that reflects the average time taken to conduct a test or inspection on a goods vehicle, a trailer a bus or a coach. Buses and coaches take longer to test than a goods vehicle or trailer with the same number of axles and their operators or presenters are therefore charged a higher amount for the test. The new fee of £40 for a 2 axle goods vehicle compares well with the fee of £37.60 for a car or £39.20 for a van. An increase later in the year is planned in fees for vehicles covered by the MoT Scheme.

The likely burden on a small business will not be any more onerous, in relation to its size than it would be for a larger business.

Compliance Costs for Businesses, Charities and Voluntary Organisations

Business Sectors Affected

The following business sectors and the number of businesses will be affected directly by the increases in fees and charges:

Operators of goods vehicles

130,000 approx

Operators of public service vehicles

10,000 approx

Owners and managers of designated premises

100

Operators of calibration centres

515

Operators of vehicles approved to the requirements of the TIR Agreement

Not more than about 200

Constructors of public service vehicles

Not more than about 100

Constructors of vehicles (motor vehicles and trailers) to TIR requirements

Not more than a couple of dozen

Compliance Costs

Recurring Costs

Statutory fees for heavy goods and public service vehicles are still lower in real terms than they were in 1992/3. The increases in June 2001 of 3%, in June 2000 by 6%, and in August 1998 of 10% were preceded by occasions when fees and charges either fell twice or were held, equivalent in real terms to a reduction of 28%.

Over half of those who have a licence to operate a goods vehicle have between one and five vehicles. The vast majority of the vehicles operated by licence holders have two axles. An increase in the fee of 5% rounded to the nearest 50p would produce a rise in the cost of a test from £38.00 to £40.00. The increase in costs for a five-vehicle fleet will be £10.00 annually. Operators who have their vehicles tested out of normal working hours will have to pay an extra £0.50 per vehicle, whilst operators of vehicles tested at a designated premises site, rather than a VI testing station, will have to find another 50p for each vehicle.

One-Off Costs

For a large proportion of operators, there will be no one-off costs. In some cases, operators of public service vehicles and vehicles on international journeys, there will be a small additional charge on account of the higher certification fees when they buy a new bus, coach or goods vehicle.

Total Compliance Costs

The total compliance costs for all businesses will be £1.3m.

Consultation with Small Businesses

Some small business have been consulted about these changes, either directly, or through one of the Trade Associations, or as a holder of a VI Customer Account. The impact of higher fees is proportionate, not unduly penalising one business more than another as the burden will increase in direct proportion to the number of vehicles being operated. Small businesses will not therefore be unduly disadvantaged.

Other Costs

There are no additional costs as a result of these changes.

Results of Consultations

The Inspectorate has consulted a number of organisations that would be affected either directly or indirectly by the higher fees and charges. These included representatives of goods vehicle, trailer, bus and coach operators as well as representatives of main dealers. VI has also sought the views of our Customer Account Holders, about 7,500 in all, about our plans for raising fees and charges.

The Road Haulage Association commented that the fees were higher than the rate of inflation. They reluctantly accepted the proposed increases but expected the standards of service to improve.

The Freight Transport Association (FTA) supported the introduction of the speed limiter setting check, but could not understand our explanation of why bus and coach operators were not being asked for a higher fee to check the limiter installation on their vehicles. VI has considered the matter and will not introduce a charge for the check of a speed limiter of a public service vehicle. Only coaches need a limiter and the proportion in the fleet of such vehicles is not that significant. It believes it can absorb the extra costs.

The FTA went on to say they were pleased to see the reference in the Impact Assessment to efficiency savings, although they would prefer more detail. They also pointed out the possibility of double counting, increasing some of the supplements for testing goods vehicles by 5% instead of 3%. The FTA asked that the Inspectorate should look again at the structure of the proposed fees as some of the proposed rises were inconsistent and that we should have kept these fees the same rather than increasing them. VI has heeded their wishes and will revise the fee structure to reduce or remove the increases from some of the fee supplements that were of concern to them.

The Confederation of Passenger Transport commented that the Inspectorate has a monopoly, although they thought that the standard fee for an annual test is reasonable compared with inspections available commercially. The CPT did have some further comments on our Five Year fee strategy and its proposals for amending the terms and conditions for designated premises (but these are not relevant points here).

The 7 Account Holders who responded said strongly that they did not support the proposals, although there was approval for the speed limiter check from one respondent.

Summary & Recommendations

The cost of initiatives to introduce extensions to the annual test to improve effectiveness, to introduce additional educational and advisory activities and to maintain levels of service will not be possible without using part of an increase in fees and supplements for tests and inspections for heavy vehicles. Costs will rise between £2.00 (hgv motor vehicle test), £4.00 (Initial Inspection COIF), £13.00 (TIR type approval), £50.00 (psv type certificate) and £8.00 for authorisation of a tachograph calibration centre.

Effects on International Competitiveness

The increases would have minimal impact on the competitiveness of vehicle operators with those operators based overseas.

Enforcement, Sanctions, Monitoring and Review

The Inspectorate enforces increases in test etc fees by requiring the new fee either before or at the time of test or inspection of the vehicle. The tachograph authorisation fee will be collected before authorisation is granted; the re-authorisation fee on the other hand is collected at the beginning of each year. Centres who do not pay up will ultimately have their authorisation withdrawn, after a period of warning.

Declaration

I have read the Regulatory Impact Assessment and I am satisfied that the balance between the cost and benefit is the right one in the circumstances.

Signed by the responsible Minister........................................................................

Date........................................................................

Contact Point

Roger Trubridge,
Vehicle Inspectorate,
Berkeley House,
Croydon Street,
Bristol BS5 0DA
Telephone: 0117 954 3272
Facsimile: 0117 954 3445
E-mail: rtrubrid@via.gov.uk