Research and Analytics

environmental

CIPFA Trading Standards Statistics


September 2005
Introduction

Trading standards and consumer protection services are intended to secure and maintain a fair and safe trading environment by ensuring that individuals are protected and that businesses compete on equal terms. They form one of a number of key regulatory services within the environmental services responsibilities of local authorities.

Trading standards perform a range of functions though there is a degree of variation between different authorities. They enforce over 80 Acts of parliament and have powers of prosecution. They also act as a source of information and advice to the general public. The services are located in county councils, unitary authorities, metropolitan districts and London boroughs in England, and in the unitary authorities in Wales and Scotland.

Key responsibilities include the coverage of fair-trading, trade descriptions, weights and measures, consumer credit, food composition and labelling, dangerous and unsafe goods including storage of petroleum, over laden goods vehicles and animal welfare. Certain functions such as waste regulation and public analysis are included in some, but by no means all authorities. There are also certain aspects of the service which may be under the control of other departments or external agencies, for example animal health. This will distort comparisons between individual authorities. This is particularly the case in terms of actions taken for services in Scotland if making comparisons with England and Wales. A full definition of the service is provided on page 9.

Recent developments include the formation of the Consumer and Trading Standards Agency (CTSA). This will oversee the work of local authority trading standards departments, setting performance standards and facilitating the sharing of good practice. Additionally, the Agency will provide central advice and support to consumers and businesses including a new telephone and internet enquiry service called ‘Consumer Direct’. This forms part of a wider government policy to introduce more targeted ‘risk-based’ inspections across the regulatory services, including trading standards, and more strategic integration between the various agents at national and local level.

More in-depth coverage of the Trading Standards service can be found in the Institute’s Technical Information Services information stream, 'Environmental Services' found at www.tisonline.net and the government’s website www.tradingstandards.gov.uk. For information about the wider role of local authority regulatory services, visit www.lacors.gov.uk.

Survey

Returns were received from 97% of local authorities in England and Wales, and for the third time data were collected from Scotland, which gave an overall response rate for Great Britain of 96%. In order to reduce the burden of data collection, figures relating to expenditure and staffing will continue to replace that previously required in the Service Delivery Plan in the National Performance Framework, in collaboration with the Department for Trade and Industry (DTI).

In order to allow more meaningful comparisons to be made, class and regional totals have been 'grossed' to take account of missing data and non-response. This has been effected by referring to information returned by authorities to last year's Trading Standards Survey. Where a return has not been received from an authority the total will be derived by attributing the same level of increase among the class average for responders, to the information observed by the authority in the previous year. Where this figure is also missing, then the totals and distribution are scaled to the per capita class average.

Spending on Trading Standards Services

In 2005-06 local authorities in England and Wales are expecting to spend a total of £192m on the provision of the Trading Standards Service, with income of £19m anticipated from grants, fees and charges for services such as weights and measures testing. In Scotland the estimated spend in 2005-06 is £24m with income of £1.4m. Net Expenditure on the Service shows a 4.6% increase over 2004-05 in England and Wales, as compared to 4.5% for Great Britain. Over the same period the RPI was 3.2%. Table 1 compares net expenditure over the past five years (including capital charges).

Trading Standards Net Expenditure - Five Year Trends
The majority of total expenditure is spent on core functions i.e. metrology; quality; safety; fair trading; additional and procedural legislation and civil legislation. Core functions seen in terms of staff costs and third party payments for sampling testing and analyses account for 74% of gross expenditure across Great Britain. The remaining costs comprise transport and premises related costs support services and capital charges. A full subjective financial breakdown is shown in Summary Tables A and B (pages 7 and 8).

Estimated Net Expenditure per head of population in 2005-06 shows particular variations between classes and regions as Figures 1a and 1b illustrate:

Net Expenditure per 1,000 Population (2005-06 Estimates, including Capital Charges)
As shown in Figure 1a, net expenditure in Metropolitan Districts is significantly lower than in the rest of Great Britain. Around the English Regions, the highest expenditure occurs in the West Midlands, closely followed by the East Midlands. The lowest spending region, Yorkshire and the Humber, spends over £1,300 less on the service per 1,000 head of population than the West Midlands.

The higher than average expenditure in Wales and Scotland may reflect the large rural areas and the relatively low population density. The situation is also seen in those English Counties of a similar nature where expenditure per head of population is relatively high. As a regulatory service, Trading Standards obviously depends on a certain level of physical visits and staff time.

Staff

The Trading Standards Service is particularly labour intensive, 69% of gross costs are employee expenses. Almost 4,500 FTE staff were expected to be employed by services at 1st April 2005, an increase of 0.3% over 2004. Table 2 summarises staff changes over the past five years.

Staff Numbers - Five Year Trends at 1st April
There has been a general concern in recent years about the numbers of Trading Standards Officers (TSOs) in Britain. This is reflected in Figures 2a and 2b, with a drop in both the number of qualified and trainee TSOs since 2002, although this trend has halted for trainee TSOs in 2005, which have seen a slight increase.

Qualified Trading Standards Officers (FTE)
Trainee Trading Standards Officers (FTE)
High Risk Businesses

Proportion of Trading Businesses in High Risk Categories at 1st April
Table 3 illustrates an encouraging trend, with the proportion of businesses in high risk categories continuing to decrease. Every class of authority where records are available has seen a fall in each of the last three years.

Table 4 puts into context the relationship between the number of Risk Businesses and the resources in place to meet those demands in terms of staff numbers. The ratios are ranked in Figure 3 with Greater London showing the highest number of businesses per staff, and Scotland showing the lowest.

Ratio of Staff to Businesses
Distribution of Risk Businesses to Staff ratio by Class and Region
Table 5 summarises workload throughout 2004-05, including actions taken. These additional factors should be taken into account when observing relative performance or cost efficiency.

Task and Performance Data 2004-05
Implications of FRS17

The full implementation of Financial Reporting Standard FRS17 was brought into being for local authorities by the Code of Practice on Local Authority Accounting in the United Kingdom, A Statement of Recommended Practice (SORP) from 1 April 2003.

The objective of FRS17 is a fair recognition of assets, liabilities and obligations of current and future retirement benefits. Under the previous arrangements the amount of retirement benefit expenditure recognised was the employer's contribution to the pension fund or, in the case of an unfunded scheme, payments to pensioners for whom the employer had direct responsibility. This meant that the revenue account did not reflect the true economic cost of pension benefits earned by employees in the year. The previous treatment only took into account the cash payments that had been made to the pension fund and to retired employees. The cash costs on their own are not a realistic measure of the cost of providing retirement benefits.

FRS17 is a complex accounting standard but its main principle is relatively simple, that an organisation should account for retirement benefits in the year it takes on responsibility for them, even if the actual payment will be many years into the future. As the pension rights earned by employees are recorded at their present value in the year earned, the increase of a scheme's liabilities during the year, due to pension rights earned in past years being one year nearer to payment, is included as interest costs. In the case of funded pension schemes the expected return on the pension assets is offset against the interest cost.

42 authorities are shown as reporting figures on a FRS17 basis for the 2005-06 Estimates, and these authorities have been highlighted with a '§' in the main tables, and are listed below.
  • Bromley;
  • Bury;
  • Rochdale;
  • Liverpool;
  • St Helens;
  • Barnsley;
  • Birmingham;
  • Dudley;
  • Solihull;
  • Blackburn with Darwen;
  • Bracknell Forest;
  • Derby;
  • East Riding of Yorkshire;
  • Herefordshire;
  • Isle of Wight;
  • Leicester;
  • North Somerset;
  • Southend-on-Sea;
  • Stoke-on-Trent;
  • Swindon;
  • Torbay;
  • Cambridgeshire;
  • Cheshire;
  • Devon;
  • Durham;
  • Hampshire;
  • Hertfordshire;
  • Leicestershire;
  • Lincolnshire;
  • Northamptonshire;
  • Northumberland;
  • Nottinghamshire;
  • Monmouthshire;
  • Pembrokeshire;
  • Powys;
  • Wrexham;
  • East Ayrshire;
  • East Lothian;
  • East Renfrewshire;
  • Stirling;
  • West Dunbartonshire;
  • Orkney.
65 authorities are shown as reporting figures on a FRS17 basis for the 2004-05 Actuals, and these authorities have been highlighted with a '#' in the main tables, and are listed below.
  • Islington;
  • Kensington and Chelsea;
  • Bromley;
  • Hounslow;
  • Richmond upon Thames;
  • Bury;
  • Manchester;
  • Rochdale;
  • Salford;
  • St Helens;
  • Barnsley;
  • Gateshead;
  • South Tyneside;
  • Birmingham;
  • Coventry;
  • Dudley;
  • Solihull;
  • Walsall;
  • Blackburn with Darwen;
  • Bracknell Forest;
  • Derby;
  • East Riding of Yorkshire;
  • Herefordshire;
  • Isle of Wight;
  • Leicester;
  • North Somerset;
  • Nottingham;
  • Plymouth;
  • Poole;
  • Portsmouth;
  • Southend-on-Sea;
  • Torbay;
  • York;
  • Buckinghamshire;
  • Cheshire;
  • Derbyshire;
  • Dorset;
  • Durham;
  • Essex;
  • Hampshire;
  • Hertfordshire;
  • Lancashire;
  • Leicestershire;
  • Lincolnshire;
  • Northamptonshire;
  • Nottinghamshire;
  • Cardiff;
  • Merthyr Tydfil;
  • Monmouthshire;
  • Newport;
  • Pembrokeshire;
  • Powys;
  • Torfaen;
  • Wrexham;
  • Dumfries and Galloway;
  • Dundee;
  • East Ayrshire;
  • East Lothian;
  • Edinburgh;
  • North Ayrshire;
  • South Lanarkshire;
  • Stirling;
  • West Dunbartonshire;
  • West Lothian;
  • Orkney.

Impact of FRS17 on Trading Standards Net Expenditure
On average, the difference between figures reported on a FRS17 basis and on a pre FRS17 basis at 1.5% is small. However care should be taken if comparing data that have been reported on a different method.


September 2005

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