The Swedish Agency for Public Management

Fees for food controls. Proposal for more efficient funding of fees (2015:17)

Public food controls are there to protect people's health and safeguard the interests of consumers. One overall objective is that food companies have confidence in the controls. Other objectives are that controls must be based on risks, they must be legally correct and the control authorities must collaborate. The Swedish National Food Agency (Livsmedelsverket) and municipalities charge food companies, e.g. slaughter-houses, restaurants and supermarkets, fees for making controls.

On commission from the government, Statskontoret (The Swedish Agency for Public Management) has evaluated the fee funding of food controls. We note that the fee model has shortcomings in both intelligibility and legitimacy. To improve the system of financing by fees and to increase the number of controls, Statskontoret puts forward a number of proposals.

Municipalities do not perform necessary controls

Past experience shows that the problems of food controls and fee financing mainly concerns municipalities. The main problem is that the municipal control authorities (individual municipalities or municipalities in collaboration) do not always perform the tests they should do under the law and their own risk assessments.

Deficiencies in controls increase the risks to human health. They also mean that food companies are not treated equally by the municipalities.

Lack of resources main reason for omission of controls

The main reason for insufficient food controls being carried out appears to be due to a shortage of resources. The problems depend in part on how fees are charged and used, but also on staff shortages. Some municipalities do not charge companies a high enough fee to cover their costs for controls. Other municipalities charge a sufficient fee, but possibly finance other operations with the proceeds.

Statskontoret's analysis shows that small municipalities generally have greater problems with food controls than larger municipalities. Among other things, it is more difficult for small municipalities to recruit and retain staff.

Large variations between hourly rates and risk classification

Statskontoret's assessment shows that there are wide variations between municipal control authorities regarding the level of hourly rates for their controls. There are also variations in how municipalities work with risk classification of food companies. Risk classification is the basis for evaluating the need for controls and governs how many control hours a food company will be charged for.

If the control fees for companies with similar operations differ greatly between different municipalities, their ability to compete on equal terms is affected. 

Deficiencies in legitimacy and intelligibility of fee model

Statskontoret notes that the fee model for food controls has deficiencies in both intelligibility and legitimacy. These deficiencies concern mainly three aspects: the risk classification model, advance payment and fees for additional controls.

Unclear link between risk classes and number of control hours

The National Food Agency's risk classification model is an important tool for determining the fees for food controls. The model aids municipalities in their calculation of how many hours they will devote to individual controls. The number of hours is multiplied by the hourly rate that the municipality has calculated for food controls. The result is the annual fee that the food company must pay for the control.

The criticisms levelled mainly by trade organizations and municipalities on the risk classification model include the fact that the link between risk category and the number of hours causes misunderstandings and dissatisfaction. An individual entrepreneur, who has paid in advance for a certain number of control hours, finds it easy to focus on the hours actually delivered. If the company does not have any controls carried out during the year, this creates dissatisfaction and distrust around the controls. The same applies if companies feel that controls are carried out for a much shorter time than they paid for.

Advance payment causes communication problems

Fees for food controls are normally sent out at the beginning of the year. This is in accordance with how the National Food Agency interprets the rules. The model of advance payment, however, creates communication problems, because the control is performed only after the fee has been paid. In some cases the municipality performs the control the following year, sometimes even later. To pay for a control that is carried out much later risks undermining the legitimacy of the fees, as well as for the food control as such.

The control authorities do not always charge for extra controls

Sometimes the control authority has to follow up previous remarks, or conduct a special control at a company after a complaint or tip. Although the regulations state that companies must pay for all costs associated with additional controls, they are not always charged for these costs. One reason is that the control authorities in certain cases believe that the control fees would be unreasonably high. For example, travel costs for controls of facilities located far away can be very high.

A simplified risk classification model should be introduced

According to Statskontoret's assessment of the National Food Agency's current risk classification model, it gives too much attention to the number of control hours. In Statskontoret's proposal for a simplified risk classification model, the importance of control hours is reduced. The model focuses on the number of control visits instead. In this way, inspectors have a greater chance of adapting working hours to the need for controls. The model we propose also provides a clearer picture of the grounds on which the fees are determined.

Payment in arrears should be made possible

Under the current model, control fees are paid in advance. However, the model lacks legitimacy in the eyes of food companies. In this regard, Statskontoret considers that a model with payment in arrears is preferable.

Statskontoret therefore proposes that the government, by amendment of the relevant ordinance, make it possible for control authorities to charge a fee after controls have been carried out.

Municipal control authorities that intend to implement payment in arrears must notify the National Food Agency. The National Food Agency should also follow up developments and see that an evaluation of how the system of payment in arrears works will be carried out some years later, both from the perspective of companies and the control authorities.  

More municipal cooperation needed for controls

Municipal cooperation can be an important instrument in reducing unjustified differences between municipalities, concerning both control fees and the number of controls carried out. Statskontoret therefore proposes that the government give county administrative boards the commission of actively encouraging municipal cooperation in food controls. As a first step, county administrative boards should be given the task of drawing up an inventory and assessing which municipalities would most benefit from cooperation regarding controls. As a second step, the government should give county governors the commission of acting as regional negotiators. Their commission should be to bring about organised collaboration between municipalities that the county administrative boards found to be in need of such cooperation.

The National Food Agency should work more actively with municipalities

Statskontoret judges that the National Food Agency could work more actively with municipalities that mismanage their control commissions. In addition to using the option of issuing injunctions, the Agency should be more clear about which municipalities do not comply with requirements and are thus subject to an injunction. For example, the National Food Agency could send the post-audit report for information to the executive board of the municipalities audited.