Funding trading standards services
A recent judicial review application over cuts to a local authority’s trading standards team highlights the need to examine funding structures, writes Melissa Dring of the Chartered Trading Standards Institute.
Earlier this month, an application for judicial review of Liverpool City Council by Chartered Trading Standards Institute (CTSI) member Stephanie Hudson was dropped after a settlement was reached by both parties. The case was important in challenging the ability of local authorities to cut smaller, poorly understood and less visible services without proper scrutiny, and fits in with a larger, ongoing battle to save consumer protection and trading standards services under threat from austerity measures.
The role of trading standards services is to protect consumers from unfair trading and support business growth by enforcing national legislation at a local level and maintaining a level playing field for legitimate business. The activities of services range from the historic function of weights and measures, through high profile community safety issues including prevention of doorstep crime and scams, to the less visible, but equally vital, activity on food composition and labelling and animal health and welfare. There are more than 250 pieces of legislation assigning separate statutory duties to trading standards – a number that continues to rise with the addition of new legislation including standardised packaging for tobacco products.
The impact of this service on economic growth, community safety and public health is often underestimated. While honest and legitimate businesses need little incentive to comply with regulations, rogue traders and criminal elements will always seek to exploit weaknesses in the system and take shortcuts which undermine fair competition and cause serious harm to the consumer. One example is the organisation of sophisticated mass marketing and internet scams which target the most vulnerable in our society, conning isolated and elderly men and women out of their life's savings. Annually mass marketing scams alone are estimated to cost the UK public between £3.5bn and £10bn a year. The non-financial impacts can be even greater, destroying family relationships and self confidence and often ending in premature entry into social care.
The perpetrators of scams can easily cross borders and spread detriment beyond local boundaries. Similarly, regulation of weights and measures, animal health, food standards – in fact most areas of trading standards responsibility, require a similar level of enforcement across the country in order to maintain a fair trading environment and protect citizens. The 2013 horsemeat scandal is just one recent example of how a fragmented enforcement system can have national impacts. Weaknesses in enforcement in one area can undermine the system as a whole.
But the local government finance system is under immense pressure, and the focus is increasingly on tackling local challenges. Trading standards services are competing for resources against high profile services with very visible impacts that are prioritised by local elected members, including social care services, bin collection and libraries. With the heads of trading standards services increasingly falling down the local government ladder, they are losing influence with cabinet members and chief executives, and struggling to make the case for a properly resourced service. The average trading standards service saw its budget fall by 40% between 2010 and 2015, with staff numbers halving in the same period. Services have lost much of their resilience and in some local authorities there are now less than two trading standards officers left.
It is against this context then that the cuts to Liverpool City Council's trading standards service were challenged. The council faces enormous financial challenges and tough decisions about which services it can continue to provide and we are full of sympathy for the elected members who have to make these decisions. However, we made a decision to actively support this challenge because it is part of the role of the Institute to make sure local authorities have the necessary information on which to base their decisions. Council documents from the date of the decision indicate that elected members were not fully informed about the duties of the authority in relation to trading standards – stating that the council's only duties were to appoint an Inspector of Weights and Measures and undertake statutory food and feed measures. In fact, as stated above, trading standards have more than 250 statutory duties under UK legislation, as well as duties derived from European Union directives such as the Unfair Commercial Practices Directive 2005. Moreover, the council had not considered the government's list of national enforcement priorities as they are required to do by the Regulatory Enforcement and Sanctions Act 2008.
In terms of real life impacts on the ground, Liverpool's staff numbers have been reduced beyond minimum level, with only four trading standards staff to protect a population of about half a million and serve the city's 12,000 businesses. The service's enforcement calendar indicates that there are no planned metrology inspections, and the council briefly suspended its work with the National Trading Standards Scams Team, leaving more than 700 known scams victims without help (they are now signed up again). Within the new reduced structure, the trading standards service have very limited capacity and would probably have to limit their activities to fire fighting and dealing only with complaints as they were coming in. Unfortunately this is not exclusive to Liverpool, with many trading standards services across the country having lost their resilience and capability to deal with major crises such as the next foot and mouth or horsemeat. Reliance on consumer complaints will not allow the service to be properly intelligence led and will lead to gaps in those areas where consumers cannot spot problems easily themselves – including food standards and metrology.
In Liverpool's case, a settlement was reached before the permission hearing which sees the application for judicial review dropped in return for a full review of the current reduced trading standards structure to determine whether it complies with all of the council's duties, including UK legislation, EU directives, and the government's national enforcement priorities. This not only has implications for Liverpool, which has committed to completing the review within three months and publishing the results on their website, but also for other local authorities which are considering reviewing their service. It is crucial that they are making these decisions based on full knowledge about their duties and an understanding of the impacts that these cuts could have on local residents. CTSI is committed to assisting local authorities by sharing the information and expertise available to us as the national membership body for the trading standards profession. We have been gathering evidence on the impacts of trading standards for a number of years and offer our assistance to any local authority having to make difficult financial decisions in these times of austerity.
In the post-election political landscape, it is clear that austerity and budget cuts will continue for a number of years, with yet more difficult decision to come for local and central government. The cross border nature of trading standards activity, combined with the lack of visibility of its crucial role in protecting the most vulnerable in our society and fostering economic growth, will mean that it has to fight harder than other services to maintain an adequate service. Liverpool is not unique in seeking to reduce its service to the statutory minimum, and without proper guidance on what this looks like, other local authorities could also be making these decisions based on incomplete information and opening themselves up to legal challenge. This situation is creating a postcode lottery where consumers cannot expect the same level of protection across the country. While we are committed to helping council's make their choices based on full information, this is clearly not a sustainable or long term solution. An urgent review of how trading standards is resourced is essential to create a sustainable and resilient service for the future.
Melissa Dring is Policy Director of the Chartered Trading Standards Institute.
