Ministry of Agriculture, Fisheries and Food and the Intervention Board : BSE, the cost of a crisis report / by the Comptroller and Auditor General.

  • National Audit Office
Date:
1998
Catalogue details

Licence: Open Government Licence

Credit: Ministry of Agriculture, Fisheries and Food and the Intervention Board : BSE, the cost of a crisis report / by the Comptroller and Auditor General. Source: Wellcome Collection.

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    * On the selection of and payments to abattoirs 8 | The Intervention Board was instructed by Ministers to implement the scheme quickly, because of its importance to the beef industry and the backlog of abattoir sector, the Board did not at the outset select abattoirs through competitive tendering which would have delayed commencement of the Scheme by at least three months. The Board instead sought to identify those that could deal with the level of throughput and reach the standard of work required. There was no evidence that the Board acted other than impartially in selecting abattoirs for participation in the scheme and industry representative associations were consulted about operation of the scheme. [Paragraphs 2.6, 2.13 to 2.21] 9 | Because there was no competitive tender, the Board set the slaughter fee after negotiation with the industry. This fee was set at £87.50 per animal on a provisional basis pending an open books examination of the industry’s costs; it was reduced to £41 in August 1996. Total slaughtering fees were £71 million in 1996-97. Competitive tendering was initiated in December 1996, when the backlog of animals awaiting slaughter had been effectively cleared, eight months after the scheme began. The Board gave priority to eliminating the backlog before the winter of 1996, to reduce the risk of animal welfare problems and financial difficulties for farmers. The average fee of £25 as a result of competition came into operation in July 1997. [Paragraphs 2.22 to 2.29] On fees for rendering Ef} = Incontrast to the abattoir situation, there was a shortage of capacity in the rendering sector . This made the Board reliant on the sector for early progress in dealing with the backlog of animals for processing. At the start of the scheme, the Board therefore negotiated with renderers an initial fee of £105 per tonne, pending a review of costs. Following this, the Board negotiated agreements with financial incentives from October 1996 to maximise throughput, rightly in the National Audit Office’s view. New contracts and prices were negotiated with renderers in January 1997, to take account of the need to render the large stocks of frozen carcasses in store. It was not until January 1998 that the Board was able to benefit from competitive tenders from individual renderers. This led to savings of some £5 million a year on amounts paid to five rendering companies. [Paragraphs 2.30 to 2.34]
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