MOT tests fees regulations: Regulatory impact assessment

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Annex C
Regulatory impact assessment

1. Title of Proposed Measure

The Motor Vehicles (Tests) (Amendment) (No.2) Regulations 2002

2. The Issue and Objective

Issue

2.1. Motorists are under a statutory obligation to submit their vehicles for periodic roadworthiness tests. The purpose of the test is to ensure that cars, light vehicles and motorcycles are checked at least once a year to ensure that they are in a roadworthy condition. In other words, that they comply with the key performance requirements in the Road Vehicles (Construction and Use) Regulations 1986 and the Road Vehicles Lighting Regulations 1989. The test also covers a number of other items - related to traffic enforcement, environmental performance and the prevention of car crime.

2.2. A fee is paid by the motorist for the test. It is now necessary to amend the Motor Vehicles (Tests) Regulations 1981 so that the levels of maximum fees payable for issuing an MOT test certificate are revised to take account of:

  • Inflation;
  • The final element of the last MOT test timing exercise 1 undertaken by the Department's Vehicle Inspectorate (VI) in 2000; and,
  • the VI 'pad fee levy 2 which includes an element to cater for the cost of supervising and computerising the MOT testing regime. On this occasion there will be no pad fee increase although one will have to be made during 2003.

Objective

2.3. To set the maximum level of test fees payable by motorists ensuring they strike the right balance between the costs to industry, the burden on motorists and the desire to maintain the highest possible standards of road safety and vehicle roadworthiness.

3. Risk Assessment

3.1. In this context of this Regulation, there is no perceived hazard, or situation, which could lead to any harm or detriment to any organisation or individual.

4. Identify Options

4.1. This year only one option has been identified:

To increase the 2002/03 fee levels from 1 August 2002 by the rate of inflation (2.5%); and an amount, the third and final allowance, following the last test timing exercise. Annex A sets out the proposed fees.

5. Identify the Benefits

5.1. For the motorist, a comprehensive, technical inspection of the vehicle is provided, at relatively low cost (currently £37.60), to ensure that it meets prescribed roadworthiness and environmental standards.

5.2. The test timing exercise has provided an accurate assessment of the time it takes to conduct the test. This has allowed the cost to be calibrated with a greater degree of accuracy and will allow any future additional testable items to be calculated quickly and easily.

5.3. This option would retain an Annual fee increase date of 1 August each year. No pad fee increase is planned this year although a significant pad fee increase will be required at the date of the next review in August 2003.

6. Quantifying and Valuing the Benefits

6.1. For the motorist, a comprehensive, technical inspection of the vehicle is provided, at relatively low cost, to ensure that it meets prescribed roadworthiness and environmental standards. Currently, the test costs £37.60 and takes approximately 49 minutes.

6.2. The consensus of opinion seems to be that, in general terms, the MOT scheme does achieve its principal objective of ensuring that all vehicles of testable age are checked once a year to ensure they are roadworthy. Most people seem to accept that the MOT test helps to keep unroadworthy cars off the road (in 1999/2000 35% of vehicles failed the test and subsequently required remedial work before being allowed back on the road). Although it is not easy to verify scientifically, the MOT test has made a worthwhile contribution to keeping down the number of accidents directly attributable to vehicle defects. In addition while a vehicle defect might not in itself cause an accident it might exacerbate or contribute to the severity of it.

6.3. To increase the chances of passing an MOT test motorists are encouraged to keep their vehicles well maintained and their engines tuned. This has increased benefits for the motorists in terms of reduced vehicle emissions, reduced fuel bills, lower maintenance costs, improved driveability and increased driver confidence in vehicle reliability.

7. Issues of Equity or Fairness

7.1. It is perceived that the proposed measure would impact proportionally across the whole industry and the motoring public. The fees are set in a way that reflect the average amount of time taken to conduct an MOT test on a certain class of vehicle. Coaches, for example, take longer to test than cars and their operators are therefore charged at a higher rate for the test. The level of the increases across all vehicle classes are generally in line with industry's expectations.

7.2. The likely burden on small businesses is not considered to be any more onerous, in relation to size, than it would be for larger businesses, although it is recognised that small operators are unable to avail themselves of the opportunities for economies of scale from which larger operators can benefit.

8. Compliance Costs for Business, Charities and Voluntary Organisations

Business Sectors Affected

8.1. This regulation will affect charities and voluntary organisations but no more so than anyone else who runs a vehicle.

8.2. Users of vehicles falling within the following MOT test classes will be affected by an increase to the MOT test fee:

  • Classes I and II - motorbicycles and motorbicycle combinations;
  • Class III - three wheeled vehicles;
  • Class IV - cars, light vans and small minibuses;
  • Class IVA - minibuses with additional seat belts fitted;
  • Class V - private buses and larger minibuses;
  • Class VA - private buses and larger minibuses with additional seat belts fitted;
  • Class VII - light goods vehicles.

8.3. Approximately 19,500 testing stations are authorised to conduct MOT testing, employing some 55,000 testers.

8.4. The main business sectors affected will be those that:

  • run goods vehicles over 3000 kg and up to 3500 kg design gross weight (that is, light goods vehicles);
  • have company vehicles of MOT testable age;
  • hire out company vehicles of MOT testable age;
  • hire out Class IVA and Class VA vehicles (effectively Class IV and Class V vehicles with additional seat belts fitted).

Compliance Cost for a Typical Business

8.5. Apart from an annual inflationary increase and a relatively small amount to cover the cost of the test timing exercise in 2000 and computerising the MOT scheme there should be no additional costs for businesses. The requirement to meet prescribed roadworthiness standards has been in force since 1961 and should feature in businesses' projected costs.

8.6. A small business with, for example, ten light goods vehicles (Class VII) on its books can expect to pay an additional £39.50 per annum in testing fees ie the cost of having one of its vehicles tested will rise from £39.20 to £43.15 - an increase of £3.95. A person with a car of MOT testable age will see the cost of the test rise from £37.60 to £39.25, an increase of £1.65.

8.7. Many garages offer discounted test fees and it is possible that they may choose not to pass the increases onto the customer.

8.8. For test Classes VA and VII the percentage increases are proportionately higher than the other classes. These increases are the third and final stage of the increases resulting from the last MOT test timing exercise.

9. Total Compliance Costs

9.1. A full breakdown of the proposed fees is attached to this Regulatory Impact Assessment.

9.2. Some 23.5 million MOT tests will be conducted in Britain in 2002/03 generating approximately £830 million for the industry. Of this sum, approximately £24.5 million will be provided to VI to administer and supervise the testing regime and to prepare and fund the cost of computerisation.

10. Consultation with Small Business: "The Litmus Test"

10.1. The Department and the VI hold regular liaison meetings with all of the main MOT trade associations in addition to a number of trade and business members. We will be consulting with them informally in the very near future.

11. Identify any Other Costs

11.1. No other costs have been identified.

12. Results of Consultation

12.1. The Department is carrying out a consultation exercise with interested parties, including motoring organisations, representatives of the garage trade and consumer groups, on the effect of these proposals. Consultees - including representative small businesses and the Federation of Small Businesses - were asked specifically for their comments on a regulatory impact assessment as part of the consultation process.

Summary and Recommendation

12.2. This assessment has indicated significant benefits that continue to accrue from MOT testing, against relatively low compliance costs for the motoring public and the smaller businesses in the MOT testing trade. It is recommended that the proposal be adopted, and that legislative backing is given to the proposed fee increases through an amendment to the Motor Vehicles (Tests) Regulations 1981.

13. Effects on International Competitiveness:

13.1. The measure would have no effect on international competitiveness.

14. Arrangements for Monitoring and Review:

14.1. Monitoring and review of costs are being undertaken through feedback during the consultation process and through the regular liaison meetings the Department and VI hold with the industry.

15. Contact Point

Thomas Roberts
Licensing, Roadworthiness & Insurance Division
Department for Transport, Local Government and the Regions
Zone 2/05
Great Minster House
76 Marsham Street
London
SW1P 4DR

Tel: 020 7944 6575
Fax: 020 7944 2459

E-mail: tom.roberts@dtlr.gsi.gov.uk

Date: 8 April 2002

16. Declaration

I have read the Regulatory Impact Assessment and I am satisfied that the benefits justify the costs.

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

Date: ..........................................................................................

David Jamieson

Parliamentary Under Secretary of State
Department for Transport, Local Government and the Regions

Proposed MOT Fees 2002/03.

Test Class

Current Fee (2001/02)

Proposed Fee (2002/03)

% Increase

Factors

Class I & II

       

Solo motorbicycles

£14.30

£14.65

2.45%

Inflation - 2.5%
         

Class II

       

Motorbicycle combinations

£23.50

£24.05

2.34%

Inflation - 2.5%
         

Class III

       

Three wheelers

£27.50

£28.15

2.36%

Inflation - 2.5%
         

Class IV

       

Cars & light vans

£37.60

£39.25

4.39%

1. Inflation - 2.5%
2. Increase in the number of catalyst equipped vehicles.

Minibuses

£39.40

£41.10

4.31%

1. Inflation - 2.5%
2. Increase in the number of catalyst equipped vehicles.
         

Class IVA

       

Minibuses with additional seat belts

£44.40

£46.20

4.05%

1. Inflation - 2.5%
2. Increase in the number of catalyst equipped vehicles
         

Class V

       

Non-PSV minibuses and buses (13-16 passenger seats)

£43.40

£44.45

2.42%

Inflation - 2.5%

Non-PSV minibuses and buses (17 or more passenger seats)

£58.90

£60.35

2.46%

Inflation - 2.5%
         

Class VA

       

Non-PSV minibuses and buses with additional seat belts (13-16 passenger seats)

£55.50

£60.20

8.47%

Inflation - 2.5%
Timing exercise (3 of 3)

Non-PSV minibuses and buses with additional seat belts (17 or more passenger seats)

£87.05

£93.30

7.18%

Inflation - 2.5%
Timing exercise (3 of 3)
         

Class VII

       

Light goods vehicles

£39.20

£43.15

10.08%

1. Inflation - 2.5%
2. Timing exercise (3 of 3)
3. Increase in the number of catalyst equipped vehicles.

1 The exercise was designed to provide updated benchmark MOT test times [ie the ‘average’ time taken to conduct an ‘average’ test].

2 The day to day administration and supervision of the MOT scheme by VI is entirely funded by income generated from the supply of blank MOT test certificates. The charge is set at a level which enables VI to recover the costs of carrying out this function. This charge is reviewed annually to ensure that the income for the subsequent year enables VI to maintain an adequate level of supervision of the standards in the MOT test.