COMMITTEE FOR THE ENVIRONMENT

Environment Committee Office
Room 245
Parliament Buildings
Stormont
BT4 3XX
alex.mcgarel@niassembly.gov.uk
Tel 028 9052 1347
Fax 028 9052 1795

Ms Una Downey
Assembly Liaison Officer
Central Management Branch
4th Floor
Clarence Court
Adelaide Street
Belfast
BT2 8GB

29 January 2009

Dear Una

Introduction by NIEA of application fees and annual subsistence charges for abstraction and impoundment licensing

On 8 December you wrote to the Committee advising that the NIEA was intending to proceed with a paper on proposals to introduce application fees and annual subsistence charges and at our request Officials from the Agency came to brief the Committee on 22 January 2009.

Following this briefing the Committee has the following comments and queries:

• The Committee acknowledges that a system of charging for abstraction and impoundment has to be put in place to comply with EU requirements but insists the system must be fair and proportionate. The Committee is not satisfied that the system currently proposed meets either of these criteria.
• NIEA Officials acknowledged that there would be an initial period of high running costs as licences were approved and granted but these should reduce as the licensing regime becomes established and annual charging will apply to relatively few licensees. The Committee would like clarification of how the annual running costs of the scheme have been calculated to reflect this ‘front loading’ and also an explanation of exactly how the annual costs will be incurred once a licence has been granted.

• NIEA Officials indicated that the team handling this issue has been operative for the last three years and in the absence of a charging system were funded by the block grant. The Committee would like to know if this funding will be kept within DOE and how it will be allocated when the full cost recovery charging mechanism is established.

• The Committee would appreciate an explanation of how the charging bands for volume have been calculated, particularly for the larger volumes which increase by a factor of 5. Members would also like to know why the Scottish Environmental Protection Agency model was chosen for these bands and how the Department justified using Scotland’s model to meet the needs and conditions in Northern Ireland.

• Charging abstractors for water on the basis of their speculative usage does not concur with the Department’s ‘polluter pays principle’. The Committee appreciates the attempt to address seasonality with the 0.3 factor proposed but notes that this does not necessarily allow for the fact that seasonality with regard to abstracting water in Northern Ireland can in practice mean 1 year in several, as opposed to a part of every year. On this basis, using a model from a region with a different climate and water availability is unlikely to be suitable for Northern Ireland and an explanation of how the 0.3 factor was determined would be appreciated.

• How will compliance be checked, particularly where declared volumes are close to a higher band threshold?

• What additional costs will there be for abstractors that currently have no water measurement instruments in place?

• Consumers will ultimately pay for all water abstracted by Northern Ireland Water. Asking consumers to pay for water that never reaches them because of leakage contradicts the Department’s principle of the ‘polluter paying’ and how does government intend to justify this?

• What is the rationale for a licence surrender fee, particularly where an abstractor is paying annual charges?

• The Committee would also like further information exemptions and on what constitutes ‘modification’ to a licence, for which there will be a £30 charge.

• The Committee also notes its concern about advance invoicing as it is inconsistent with the Department’s principle of the ‘polluter paying’.

• The Committee would appreciate receipt of a revised version of the document that provided examples of the proposed charging mechanism more clearly.

Yours sincerely

Dr Alex McGarel
Clerk, Committee for the Environment