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Local Authorities and the Scrap Metal Dealers Act 2013

Local Authorities and the Scrap Metal Dealers Act 2013 - Gillian Temple
President of SMDA, Gillian Temple

Gillian Temple, President of the Scrap Metal Dealers Association (SMDA) provides information relating to abnormalities in fees charged to ATFs, Scrap Metal Dealers and itinerant collectors by local authorities and what the SMDA are doing to help correct this.

In October 2013, the new Scrap Metal Dealers Act came into force, replacing the SMDA 1964 act that previously did not include Motor Salvage Operators, itinerant collectors, ATFs or British Transport Police. The 2013 Act creates a fee raising power for Local Authorities, to allow them to recover the costs stemming from administering and seeking compliance with the new regime it would be controlling through licensing, an activity they had previously done for scrap metal dealers.

In addition to the new licence fee, Schedule 1(6) of the 2013 Act provides that an application must also be accompanied by a fee, again set by the Licensing Authority.

The licence fee cannot be used to support enforcement activity against unlicensed scrap metal dealers. Any activity taken against unlicensed operators must be funded through existing funds, which in our opinion, would suggest the reason why only one closure order for an illegal site has every been made in the 6 ½ years that the councils have had powers to close illegal sites (and that site remains open).

A European Union directive given to every country within the EU also states that any licence fee can only be used to pay for the cost associated with the licensing process.  In effect, each Local Authority must ensure that the income from fees charged for each service does not exceed the costs of providing that service.

The Scrap Metal Dealers Association believes this to be fair, but what happens when no one is policing the Local Authorities?

At the beginning of 2019 the Scrap Metal Dealers Association began to collect data from all the Licensing Departments in every Local Authority, a task we are still to complete. Within days of receiving the trickle of information, it became abundantly clear that there were serious abnormalities to the fee structures and information being given and charged to ATF and Scrap Metal Dealers and itinerant collectors.

Bearing in mind that councils throughout the country do the same process, and gather the same information for a ATF/site to be registered, there are some councils that can offer the service for £250 whilst others charge £1522 for the same service they provide us, the paying public.

In March 2019 we were shocked to find that Bath and North Somerset Council were charging every site, ATF, and itinerant collector a fee (£306 for sites) and then a maintenance fee they had invented of £3670 to every single one on their register. Upon questioning the legality of this fee, the Scrap Metal Dealers Association were informed that the £3670 fee would not be applicable and sites and collectors would get a refund.

As we queried more and more council practices, it became clear that Licensing Authorities have either lost their employees training and knowledge through retirements or natural employee movement, or that they have lost their understanding of their obligations and the rights of the consumer under the SMDA 2013.

We have since been offering local authorities training to fill the gaps in their understanding and we continue to weed out practices that seem amiss.

In Birmingham, Scrap sites and ATFs are charged the highest licensing fee in the Country. We were warned that it is almost impossible to get a response to any communication our members sent to Birmingham City Council, which became evident. After 3 months we were given a link to a webpage that confirmed that the application cost was £601 and that the licence fee was £921 for a new site.

When asked for a breakdown of these rather high fees, we were (eventually) given the following document showing the times they spent on the fee application and the handing out of a licence.

Scrap Dealer Site

       

TIME

Processing

Application

Licence

 

5

Letters sent

5

   

5

Application received /checked for completeness

5

   

20

Details entered on system

20

   

15

DBS checked /copied

15

   

5

Police referral email

5

   

10

System updated with referral result

10

   

15

Licence issued on system & sent

15

   

20

chase up documentation etc

20

   

5

Letters (minimum 2)

 

5

 

30

Meeting with applicant to assess suitability/check paperwork

 

30

 

60

for a site licence(not including travel)

 

60

 

10

EA Public Register checks conducted

 

10

 

10

Company/Partnership checks made (if applicable)

 

10

 

15

Review application and update system

 

15

 

10

Representation entered onto system

 

10

 
 

Compliance

     
 

Per site

     

360

3 x 60 minutes x 2 officers

 

360

 

TOTALS

 

95

500

 

The table is in minutes. Birmingham City Council claim that they charge £2.56 per minute. As any budding mathematician will tell you, 95 minutes at £2.56 for an application fee is £ 243.20 not the £601 being charged. However, the 500 minutes they claim they spend on the issuing of a licence works out as £1280 not the £921 they claim they are charging. It might seem like swings and roundabouts, with the total cost being £1523.20 when they actually charge £1522, but the accounting is incorrect and therefore breaching the EU directive and the Scrap Metal Dealers Act. In theory, if you apply for a license and then are not granted that license you have been overcharged.

Furthermore there are members of our Association in the Birmingham City catchment area, that claim they have NEVER had a visit from the licensing authority during the three year licensing period, a service which they are being charged for, and not receiving, costing us, the fee payer an overpayment of 360 minutes or £921.60 per licence. Admittedly if we took £921.60 from the £1522 charged it would be £600, which is more in keeping with the top-end other councils in the country.

In March 2019 we were told that Birmingham City Council had passed the information to their legal team and they would tell us the council’s position. They have not. We are now awaiting a response from their internal auditors before taking the matter for a judicial review, using their own paperwork against them.

Although Birmingham are by far the most difficult council to get a response from to date, they are not the only council that has trouble adding up. Oxford Council claimed they charge £51.30 an hour for their Licensing Officers to carry out checks. A Service manager then checks those checks at £128 per hour. When the Scrap Metal Dealers Association queried this, we were told it was a typo error, we are yet to be informed how much the Service manager is charging the fee payer and the hours he takes to check the licensing officers work.

With council after council having a different method of charging ATFs for a service they are paid to provide, it has lead to utter confusion and ambiguity. No one is policing these authorities until now. It is ridiculous that our Association has to take councils, that can not afford to go after the illegal operators, into a court so that they forced by law, do their job correctly and without making a profit from our industry.

Further update from the SMDA

Since receiving the above, the SMDA had an email from Enfield council that had been charging itinerant collectors £701 for a licence. After the SMDA contacted them, Enfield council replied:

“I can confirm that following your comments we have now reviewed and revised the fee structure for the scrap metal collectors license. I apologise it has taken some time to respond to you.

We accept that we cannot charge for the “premises inspection” when essential this is a mobile license”. 

The SMDA said the council now propose to charge collectors only £230 – a refund of £471.

The Scrap Metal Dealers Association can be contacted through www.smda.org.uk or via info@smda.org.uk 

 

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