The Maritime and Coastguard Agency (MCA) is required to comply with the guidance set out in HM Treasury’s publication Managing Public Money when recovering the full cost of the fee-funded services it provides in its role as a regulator which covers direct and indirect costs associated with delivering services to the public. The full cost recovery norm to fees ensures Government neither profits at the expense of consumers nor makes a loss for taxpayers to subsidise.
Since September 2006, the MCA has not changed its fee level and has consequently absorbed increases in ship registrations, ship surveys and merchant navy training costs. As a result, the industry has paid below-cost fees so the services which the industry has received have been publicly subsidised. There has been a shortfall between income and costs for the services provided in each year since 2010-11 (and likely since 2006). The shortfall for 2010-11 (the base year) is estimated at £3.7m (in 2010 prices). MCA efficiency improvements have helped maintain standards while keeping costs down.
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