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Parliamentary Commissioner for Administration

Selected Cases and Summaries of Completed Investigations - April to September 2000

Volume 3 - 3rd REPORT - SESSION 2000-2001

Chapter 1

MINISTRY OF AGRICULTURE, FISHERIES AND FOOD

1. Case No. C.1380/99

Incorrect guidance regarding the level of veterinary supervision in abattoirs

Summary

Mr N, an abattoir operator, complained that the Ministry of Agriculture, Fisheries and Food had misinterpreted a European Commission Directive on the level of veterinary supervision required in abattoirs and issued incorrect guidance on the subject, causing him financial loss. The Ombudsman found that a circular issued by the Ministry of Agriculture, Fisheries and Food on the subject in November 1992 had attempted to modify the rigours of the Directive so as to avoid creating too many "hard cases", and thus to eliminate difficulties arising from such cases. In making that attempt the circular had deliberately departed from the requirements of the legislation which it purported to outline, and it risked disadvantaging consumers in general and those abattoir operators who had by then already taken steps to comply with the concepts of the Directive. The Ministry of Agriculture, Fisheries and Food agreed to reimburse Mr N for expenses he had incurred and wasted in relation to an expansion project that he had abandoned following the issue of the circular; steps would be taken to identify and compensate others similarly affected.

Full text

1. Mr N complained that the Ministry of Agriculture, Fisheries and Food (MAFF) had misinterpreted Directive 64/433/EEC as amended by Directive 91/497/EEC and given effect in Great Britain by the Fresh Meat (Hygiene and Inspection) Regulations 1992, and issued incorrect guidance on the subject, causing him financial loss.

2. My investigation began in April 1999 after I had obtained comments from the then Permanent Secretary of MAFF. I have not put into this report every detail investigated but I am satisfied that no matter of significance has been overlooked.

3. An earlier complaint by Mr N was the subject of a report by my predecessor which was issued on 4 October 1995. That report is reproduced at Annex A.

Statutory and administrative background

4. In 1964 Directive 64/433/EEC standardised health requirements for meat in abattoirs engaged in slaughtering for export to other European Economic Community countries. The Directive required ante-mortem and post-mortem inspection of animals by an official veterinarian. When carrying out the post-mortem inspection the veterinarian might use assistants placed under his authority and responsibility. In preparation for the single market which was to operate from 1 January 1993 the European Commission indicated that they intended to impose common structural and hygiene standards for all abattoirs, including those slaughtering for domestic markets. In 1990 MAFF issued guidance to the State Veterinary Service that advice given to the industry should emphasise that compliance with those standards would be required of abattoirs if they wished to trade in the single market. In 1991 subsidy by government of the veterinary costs of abattoirs slaughtering for export ended.

5. On 29 July 1991 Directive 91/497/EEC extended the rules on veterinary supervision to cover all abattoirs with effect from 1 January 1993. The Directive said that in abattoirs (other than permanently derogated low throughput abattoirs) Member States should ensure the permanent presence of at least one official veterinarian throughout the ante-mortem and post-mortem inspections. The veterinarian might be assisted by auxiliaries provided that at the ante-mortem inspection the auxiliary's role was limited to an initial check on the animal and to help with purely practical tasks, and that at the post-mortem inspection the veterinarian was able to supervise the work of the auxiliaries on the spot. Temporary derogations allowed operators until the end of 1995 to upgrade their structures, though they would still have to comply with the hygiene standards. On 10 September 1992 the Fresh Meat (Hygiene and Inspection) Regulations 1992 were laid before Parliament. Those regulations gave force to the 1991 Directive and stipulated that all abattoirs were to be licensed by the appropriate agriculture Minister. Licenses would be granted only to those abattoirs which complied with the detailed requirements on structure, hygiene and inspection. Local authorities were required to appoint veterinarians to supervise abattoirs, and inspectors to undertake limited ante-mortem tasks and post-mortem health inspection, under the supervision and responsibility of a veterinarian.

6. On 17 September 1992 MAFF issued to local authorities Circular FSH 1/92, which said that from 1 January 1993 all abattoirs covered by the regulations would be subject to supervision by an official veterinary surgeon who would carry out the ante-mortem inspection. In abattoirs (other than low throughput abattoirs) the official veterinary surgeon would be on the premises to supervise the post-mortem inspection. In low throughput abattoirs, the official veterinary surgeon need not be present during slaughtering but post-mortem inspection would be done by, or under the supervision of, the official veterinary surgeon, within 24 hours of slaughter. The degree of attendance would be a matter for the local authority's judgment. A number of abattoirs, particularly medium-sized abattoirs, complained that their local authorities intended to impose full-time veterinary supervision. On 21 October 1992 the matter was debated in Parliament. On 30 November MAFF issued Circular FSH 4/92, which affirmed the requirement that all animals should receive an ante-mortem inspection by an official veterinary surgeon. It recommended that local authorities should base their decisions on the level of official veterinary surgeon attendance on livestock throughput as indicated in an annex, but with the discretion, on the advice of the official veterinary surgeon, to adjust the figures by plus or minus 10%. For small abattoirs such as Mr N's the recommended daily attendance was 30% of normal operating time.

Mr N's case

7. In early 1992, following discussions with the State Veterinary Service about the effect of the 1991 Directive, Mr N decided to expand his abattoir. On 20 March he applied for a temporary derogation to allow him to continue operating after 1 January 1993 while work upgrading his premises was taking place. In that application he said that he anticipated completing the work by the end of 1993. In August 1992 he closed the abattoir temporarily to concentrate on planning issues. On 23 November he applied for a licence to increase his annual slaughtering total from 1,786 to 11,219 livestock units per annum. According to Mr N, around that time he learned that it was no longer going to be necessary for abattoirs to have full-time veterinary supervision; that meant that smaller abattoirs which he had anticipated would close because of the cost of full-time veterinary supervision would be encouraged to stay open and his plans in turn would have to be revised.

8. On 25 May 1993 solicitors acting for Mr N wrote to MAFF claiming compensation for expenditure on upgrading his abattoir which he considered had been wasted. They said that MAFF had encouraged Mr N to upgrade the abattoir and he had engaged professionals to assist him in preparing designs and obtaining planning and building regulation approval. On 24 June the claim was rejected on the grounds that Mr N had made a commercial judgment regarding his expansion plans and MAFF could not be held responsible for any loss.

9. Mr N complained to my predecessor. My predecessor found that Circular FSH 4/92 (paragraph 1.6) had been a substantial change from the position set out in Circular FSH 1/92, albeit made at the behest and in the best interests of the industry, in that it had not stipulated official veterinary surgeon presence during the post-mortem examination and had unequivocally stated that for many abattoirs full-time official veterinary surgeon supervision would not be required. That had understandably come as something of a shock to Mr N, who until then had reasonably believed that a permanent official veterinary surgeon presence during slaughtering would be required and had planned the expansion of his abattoir so as to meet the increased cost of such supervision. However, my predecessor found that Mr N had been given the best advice available at the time on the implications of the 1991 Directive; it had been a matter of bad luck, not maladministration, that MAFF's very late change in policy interpretation had affected Mr N's plans.

10. On 9 October 1995 Mr N wrote to my predecessor complaining that MAFF had been maladministrative in neglecting to warn the industry that policy could change so dramatically. He accepted that it had been his decision not to re-open the abattoir after August 1992 and that he should therefore bear any loss of income consequent upon that, but argued that MAFF's maladministration had caused him to incur wasted fees in preparing for expansion, which they should therefore reimburse. On 13 October my predecessor replied saying that he did not believe that he would be justified in criticising MAFF for failing to signal possible future policy changes which they could not have reasonably envisaged having to make. He saw no grounds for re-opening Mr N's case.

Subsequent developments

11. In June 1997 the European Commission inspected the United Kingdom's implementing measures in respect of, among other matters, Directives 64/433/EEC and 91/497/EEC. On 22 September the Commission informed the Government that the guidelines issued in the United Kingdom for veterinary supervision at abattoirs did not comply with the Directives. On 16 October MAFF responded to the Commission that the United Kingdom remained committed to bringing veterinary supervision levels in all premises fully into line with the requirements of European legislation as quickly as possible and efforts were being made to recruit and train the additional qualified staff needed to increase supervision levels further.

12. On 26 May 1998 the Commission issued a 'reasoned opinion' under article 169 of the Treaty of Rome. They said that during an inspection visit in June 1997 it had been found that on 23 August 1996 guidelines on veterinary supervision levels in abattoirs had been issued through the Meat Hygiene Service (an executive agency of MAFF who in April 1995 had taken over from local authorities responsibility for enforcing regulations on meat hygiene in Great Britain). Those guidelines recommended that for full-throughput abattoirs a veterinarian should be present for a period ranging from around two hours daily to one lengthier weekly visit depending on the size of the establishment. For low-throughput abattoirs the recommended level of veterinary supervision was 15% to 25% of days of operation. The Commission said that those guidelines did not comply with the Directives, which required the permanent presence of at least one official veterinarian throughout the ante-mortem and post-mortem inspections. The Commission noted that the United Kingdom authorities did not dispute the fact that veterinary supervision was unsatisfactory due to the inadequate number of veterinary surgeons available. They concluded that the United Kingdom had failed to fulfil its statutory obligations with regard to the level of veterinary supervision in abattoirs. On 24 July MAFF responded to the Commission accepting that the level of veterinary supervision in abattoirs did not meet the requirements of the Directives and that accordingly the United Kingdom had failed to meet its statutory obligations. They said that they were working to correct that situation and had produced a programme of changes designed over time to bring all supervision fully into line with statutory requirements; full immediate compliance was not possible due to a shortfall in the number of veterinarians available to undertake meat hygiene work in the United Kingdom. They explained that the guidelines issued on 23 August 1996 had been intended to ensure the maximum possible level of veterinary supervision consistent with the long-term shortage of veterinarians, and had in effect required the largest abattoirs to be under permanent veterinary supervision; however, they recognised that the guidelines did not comply with the Directives, and had withdrawn them.

13. On 3 September the Meat Hygiene Service wrote to abattoir operators outlining the position and advising them of the need for an increase in the level of veterinary supervision in incremental stages as veterinary resources became available. They said that operators would be notified of the intended arrangements in advance and would have to bear the cost of the additional supervision. The Government recognised that that would be unwelcome to the industry but steps had to be taken to correct the United Kingdom's under-implementation of the legal requirements.

14. On 6 October Mr N complained to me on the grounds that the letter of 3 September showed that whoever had been responsible for transposing the 1991 Directive to the 1992 regulations and issuing Circular FSH 4/92 had been maladministrative in misinterpreting the Directive.

Investigation

15. My staff examined MAFF's files relating to the introduction of Circular FSH 4/92. The papers indicate the following events relevant to Mr N's complaint.

16. On 5 February 1992 MAFF circulated internally a draft of the regulations which they intended would implement the 1991 Directive. In an accompanying note they said that in general their approach had been to take the least onerous interpretation of the Directive consistent with protecting human health and maintaining trade and consumer confidence, and consistent with then existing domestic legislation. Detailed rules on how much time the official veterinarian should spend in different classes of premises were not spelled out in the regulations; that would appear as guidance in the FSH Circular which would accompany the regulations. That would mean that they could provide sufficient flexibility to take account of different plants and avoid tying local authorities to targets which might be difficult to meet. The guidance would lay down minimum visiting intervals, set out what the veterinarian should cover during inspection visits and within those guidelines urge local authorities to adopt a 'risk assessment' approach. In that way additional inspections, and therefore costs to operators, could partly be avoided by good practice and high standards on their part.

17. On 27 February MAFF officials circulated internally a draft submission to the then Parliamentary Secretary seeking authority to consult interested parties on the proposed regulations. The draft submission said that the regulations aimed to balance the legitimate interests of consumers, enforcement authorities and businesses; in general the line taken was to require the minimum which was consistent with the spirit of the Directive and with current domestic legislation. On the subject of veterinary supervision the draft submission said that MAFF had sought to concentrate veterinary resources at abattoirs and to minimise their use 'downstream' at cutting plants and cold stores. That was partly to ease what MAFF anticipated would be a difficult staffing problem for local authorities and partly to address the problem of the cost of meat inspections. MAFF proposed that, as the Directive required, there should be an official veterinarian presence at abattoirs throughout the ante-mortem and post-mortem inspection, with some flexibility at low-throughput premises. They added that although their guidelines would provide flexibility in the use of assistants local authorities were still likely to have difficulty in providing veterinary supervision for all premises. Strictly speaking Ministers would have to refuse to license premises if veterinary supervision was inadequate; in practice they would be unwilling to close businesses on grounds such as those, which were outside the businesses' control. They might therefore need to consider redrafting the guidance at some stage to match available resources; at that time they did not know the extent of the resource problem. MAFF recommended that the then Parliamentary Secretary agree to consult on the basis of the guidelines they had described for veterinary supervision in order to prompt a reaction from local authorities, and that he should be prepared to take into account local authority views in the consultation process so as to ease the introduction of veterinary supervision of all premises.

18. Accompanying the draft submission was a draft FSH Circular, which said that from 1 January 1993 all premises covered by the regulations would be subject to supervision by an official veterinary surgeon appointed by the local authority. The degree of veterinary attendance would vary according to circumstances and would be a matter for the judgment of the local authority, having regard in particular to a number of factors which the Circular listed. At abattoirs, an official veterinary surgeon should be present on the premises for the purpose of supervising ante-mortem and post-mortem inspections and be available for any problem cases which arose in the course of such inspections.

19. Comments by MAFF officials on the draft submission and draft FSH Circular indicated concern that MAFF should adhere to the written terms of the 1991 Directive. On 6 March MAFF officials put the submission to the then Parliamentary Secretary. The submission said the same things about veterinary supervision as the draft, but added that even with the proposals as then drafted there might be some risk of criticism from the European Commission that MAFF were not fully reflecting the 1991 Directive. MAFF said that they would defend their guidance on the basis that it was the best they could achieve with the available veterinary resources and represented a genuine attempt to comply with requirements. A note accompanying the submission said that there had been considerable pressure from the industry as to what MAFF's intentions were in interpreting the 1991 Directive. On 15 April the Minister agreed to proceed to consultation, which MAFF did on 23 April.

20. On 11 June the Federation of Fresh Meat Wholesalers responded to MAFF's consultation. On the subject of veterinary supervision they said that the draft regulations were unclear about the degree of personal supervision necessary and the time which official veterinary surgeons were required to spend on premises. They asked MAFF to clarify that it was unnecessary for a veterinarian to carry out every ante-mortem inspection personally, and that there was no general need for full-time veterinary attendance, or any veterinary attendance when there was no work which required their particular training and skills. On 25 June MAFF officials met representatives of the Federation. According to MAFF's note of the meeting, the Federation had shared the same concerns with regard to veterinary supervision as many respondents to the MAFF consultation. MAFF had been unable to confirm that an official veterinary surgeon would not have to carry out every ante-mortem inspection personally, although they had pointed out that the 1991 Directive provided for the use of inspectors (that is, non-veterinary officers) so that the amount of official veterinary surgeon time spent on ante-mortem inspections would be much reduced. The Federation had been concerned that costs would soar if the official veterinary surgeon had to inspect every animal. MAFF had acknowledged that their draft guidance to local authorities was not particularly clear and had said that they would be seeking to make it more transparent with respect to veterinary attendance and veterinary functions in licensed premises.

21. On 2 July MAFF circulated internally a further draft submission to the then Parliamentary Secretary. That draft submission sought the then Parliamentary Secretary's agreement to courses of action proposed on the main issues arising out of the public consultation on the proposed regulations. Regarding veterinary supervision, it said that local authorities had expressed themselves extremely concerned about the difficulties which they might face in providing official veterinary surgeon supervision, and needed to know the exact supervisory requirement that would apply in individual establishments. Many respondents to the consultation had been concerned that a literal implementation of the requirements of the 1991 Directive would lead to supervision and inspection requirements which were so costly that many abattoirs would not be able to operate under them. They had been particularly concerned that an official veterinary surgeon should not have to be present throughout the ante-mortem, slaughtering and post-mortem operation but that much of that work should be done by an inspector under the supervision of the official veterinary surgeon. The draft submission also said that the then Parliamentary Secretary had agreed to take account of the views of local authorities on the guidelines for supervision arrangements notwithstanding the fact that even as drafted they did not fully reflect the 1991 Directive. In the light of the comments received from respondents to the consultation and in view of the difficulties faced by local authorities in resourcing the supervision requirements as then currently provided for in the guidance, it was proposed to revise that guidance to make it clear what supervision arrangements would involve. In abattoirs (other than low throughput abattoirs) it was proposed that the official veterinary surgeon should be present on the premises throughout ante-mortem and post-mortem inspection (which could be carried out under his supervision by a qualified inspector) while devoting sufficient time to the supervision of other operations. It was noted that that accorded with the 1991 Directive except that the Directive required the official veterinary surgeon to carry out the ante-mortem inspection personally. It was also noted that that flexibility existed in the regulations then currently pertaining to exports to other Member States and had not been mentioned by European Commission inspectors in the course of their visits. The draft submission concluded by recommending that the then Parliamentary Secretary agree that proposals for veterinary supervision should be amended to take account of the costs to industry and the likely shortage of veterinarians.

22. On 10 July MAFF officials put the final version of the submission to the then Parliamentary Secretary. The submission proposed that MAFF's guidelines be revised to make clear that the Directive required that an official veterinary surgeon had to carry out the ante-mortem inspection and be at the premises to supervise the post-mortem inspection. Where a local authority had genuine difficulty in providing the full level of supervision required by the Directive they should ensure that the official veterinary surgeon carried out the ante-mortem inspection and was at the premises regularly and frequently enough to enable him to exercise effective supervision of the post-mortem inspection. Following discussion, on 17 July the then Parliamentary Secretary was said to be broadly content with the proposals.

23. On 17 September MAFF wrote to the Association of District Councils enclosing a copy of Circular FSH 1/92. The letter said that while MAFF acknowledged that some local authorities would prefer a definitive statement about veterinary attendance it would not be sensible or appropriate for MAFF to provide such a statement. Their aim in drafting the guidance had been to provide local authorities with sufficient flexibility, within the parameters of the Directive, to manage the transition to the new arrangements sensibly and cost effectively. Addressing concerns which had been raised in previous correspondence, MAFF said that if European Commission inspectors criticised local authorities who took advantage of the flexibility offered by the guidelines, MAFF would stand by the guidance and support any local authority who had used their best endeavours to provide an inspection service which complied with the Circular. MAFF would do what they could to assist local authorities who were having difficulties in providing veterinary cover. The final version of Circular FSH 1/92 said that from 1 January 1993 all premises covered by the regulations were subject to supervision by an official veterinary surgeon appointed by the local authority. The degree of official veterinary surgeon attendance would vary according to circumstances and would be a matter for the judgment of the local authority, having regard in particular to a number of factors including throughput, number of inspectors, design of the abattoir and management effectiveness. At full throughput abattoirs, the Directive required that an official veterinary surgeon had to carry out the ante-mortem inspection and be at the premises to supervise the post-mortem inspection. Where a local authority had genuine difficulty in providing the full level of supervision required by the Directive they should ensure that the official veterinary surgeon carried out the ante-mortem inspection and was at the premises regularly and frequently enough to enable him to exercise effective supervision of the post-mortem inspection.

24. On 12 October, in a memorandum to MAFF officials, the Private Secretary of the then Parliamentary Secretary said that the then Parliamentary Secretary wished to reassure himself that the United Kingdom was interpreting the 1991 Directive as flexibly as possible, as he was extremely concerned that the new regulations to which small businesses were subject could lead to closures. On 21 October the effect of the Directive on the slaughtering industry was discussed in Parliament in an adjournment debate. The Member who had secured the debate urged the Government to adopt a more flexible approach to veterinary supervision in abattoirs so as to avoid the closure of small abattoirs. The then Parliamentary Secretary replied that the Government fully supported the principle of veterinary supervision at abattoirs, particularly the requirement for an ante-mortem inspection by an official veterinary surgeon. They appreciated the cost implications for abattoirs of the Directive's requirements for veterinary supervision. In their guidance to local authorities they had sought to give as much flexibility as possible. It would not be in the interests of the meat industry to exclude any abattoir from the requirements for veterinary supervision; that would be contrary to the European legislation and the interest of consumers. The Government would be sensible and flexible in their interpretation and application of the new regulations and would ensure to the best of their ability that no-one would be disadvantaged. If premises closed, it would be either because they could not or would not improve their hygiene standards or because they had taken a commercial decision not to invest in the future of their business. On 22 October the then Parliamentary Secretary wrote to the then Minister of State. He said that there was considerable strength of feeling in Parliament that the 1992 regulations were over-bureaucratic and threatened the existence of small abattoirs in rural areas. The Opposition had prayed against the regulations and the Government might find themselves in an uncomfortable position were that prayer to go to debate. The future of the proposed Meat Hygiene Service was dependent on the regulations being in place; every effort should be made to persuade colleagues that the regulations would be implemented in as flexible and sensitive a manner as possible.

25. On 23 October MAFF officials made a submission to the then Parliamentary Secretary. They said that following the adjournment debate they had given some thought to the scope for any further compromise on veterinary supervision if it should become necessary to offer concessions in order to avoid defeat when the 1992 regulations were debated. They outlined two possible options, which they warned involved risks of legal action by the European Commission. They also warned that any guidance that resulted in lower levels of veterinary supervision for those plants operating under temporary derogations involved risks of legal action by abattoir operators who had acted on Ministers' statements about the advantages of structural upgrading in readiness for the single market and who would feel they were being penalised twice over if their competitors were allowed inspection as well as structural derogations. The first option was to elaborate on the guidance in Circular FSH 1/92 concerning the factors which local authorities should take into account when deciding the degree of veterinary attendance, by providing them with a risk assessment framework on which to base their decisions. The MAFF officials attached a draft framework, which awarded points according to factors such as throughput, type of animals slaughtered, standards and management; depending upon the number of points scored, the minimum official veterinary surgeon attendance at an abattoir could range from 10% to 100% of total hours of slaughter. They pointed out that such a system would be liable to a legal challenge by the European Commission since it made plain the intention that many abattoirs should operate without full-time veterinary presence. The second option was that full implementation of the 1991 Directive be delayed until the establishment of the Meat Hygiene Service. The submission noted that that would be a clear breach of the United Kingdom's obligations under the Directive, an obstacle which in practice might be overcome if the Government could commit themselves to setting up the Meat Hygiene Service in early 1994 (a year earlier than planned). The submission concluded by inviting Ministers to consider whether it was necessary to make further concessions on veterinary supervision of abattoirs in order to avoid defeat if the 1992 regulations were debated. If so, Ministers might wish to consider whether to accelerate the creation of the Meat Hygiene Service. If that was not feasible, consideration could be given to issuing further guidance to local authorities on levels of veterinary attendance, on the basis of the draft risk assessment; Ministers were asked to bear in mind that that course risked legal action by the European Commission and would make it more difficult to introduce full veterinary supervision, as required by the Directive, in the longer term.

26. Also on 23 October MAFF officials submitted a brief for the then Minister's use at a Select Committee appearance scheduled for 28 October. The brief explained that compliance costs for the abattoir industry as a result of the Directive arose in two areas, structural upgrading and veterinary supervision; the cost of veterinary supervision was emerging as the principal concern. In the guidance to local authorities, MAFF had sought to give local authorities as much flexibility as possible, within the principle laid down in the Directive, to vary the level of veterinary attendance; the relevant paragraphs of Circular FSH 1/92 had been carefully drafted to avoid advertising the fact that the guidance given represented a departure from the precise requirements in the Directive. However, local authorities were said to have proved reluctant to take advantage of that flexibility and MAFF were being pressed for firmer guidance. Many abattoir operators who had followed MAFF's exhortations to invest for the new requirements would feel that their investments had been wasted if MAFF relaxed their requirements even further (that is, for their competitors who had been given three years to comply with the structural requirements).

27. On 26 October the Federation of Fresh Meat Wholesalers wrote to the then Minister. They said that many meat plants had spent considerable sums upgrading to meet the new requirements as a result of statements issued by the Minister and his predecessors. Industry had pointed out over a period of years that legislation to bring the new requirements into effect would lead to many closures of meat plants. Most of those closures would be of small to medium-size plants unable to expand sufficiently to absorb the additional costs, not least of which was the cost of veterinary supervision. The Federation understood that local authorities were having difficulties recruiting veterinarians, and that MAFF had been under pressure to grant further derogations and to retain the status quo on ante-mortem inspection by inspectors rather than by veterinarians. They warned that there would be outrage if inspection derogations were made at that very late stage to benefit some rather than all plants, and called for MAFF to pay for veterinary services if an equal service could not be provided for all.

28. On 30 October the then Parliamentary Secretary wrote to the then Deputy Chief Whip about members of the legislature's concerns about the impact of the 1992 regulations. He explained the background to the Directive and said that in the implementing legislation and administrative arrangements MAFF had taken full advantage of the flexibility offered by the Directive and in some small but important areas had not implemented the Directive correctly. He was satisfied that a sensible balance was being struck between compliance with the obligations MAFF had accepted when the Directive had been agreed and avoiding unnecessary burdens on the industry. In particular, he considered that requiring ante-mortem inspection of all animals by a veterinarian was justified. He pointed out that not all abattoirs were complying with then current hygiene regulations and the opportunity needed to be taken to tackle long-standing problems in that respect. He had looked particularly carefully at the scope for reducing the costs of veterinary supervision. The Circular allowed local authorities a good deal of flexibility but there was some evidence that some local authorities were not being as constructive as they might be. He had decided to issue further guidance to local authorities which would ensure that veterinary supervision was targeted on those plants which presented the highest risk. That would not necessarily reduce costs at all the small rural abattoirs, but would demonstrate that veterinary input was being directed to best effect and provide an incentive for abattoirs to improve their operating practices so as to reduce the level of supervision. He hoped that that would reduce some of the anxieties.

29. On 4 November MAFF circulated internally the draft risk assessment framework that had accompanied the submission of 23 October, for further consideration before the issue of a further FSH Circular. On 17 November MAFF officials submitted to Ministers for approval a further draft FSH Circular. In an accompanying note officials said that they had concluded that it was not possible in the short term to devise a satisfactory system of numerical scores as a means of assessing risk. It would have been unfair to impose costs on individual plants based on a risk assessment system that had not been tried and validated. They believed that the only alternative was to introduce guidance based on throughput levels, but with local authorities being given the discretion to vary the percentage of veterinary cover required by plus or minus 10% on the basis of the standard of hygiene and management control. They added: "He [that is, the Minister] is of course already aware that the Directive does not give us scope to vary the level of veterinary attendance in the way now proposed and that if this guidance comes to the Commission's attention it may attract action under Article 169 [that is, a legal challenge]. I should also point out that Legal Department advise that any consumer who is harmed by consumption of meat from a premises which is not under permanent veterinary supervision as a result of this guidance could attempt to bring an action against the Minister for negligence; this is almost certainly a remote risk since it is most unusual for food poisoning outbreaks to be traced back to an individual slaughterhouse. As indicated above, more than three quarters of total production already comes from premises which will have full-time veterinary supervision, and this proportion will inevitably rise."

30. The draft FSH Circular said that, in response to requests from local authorities since the issue of Circular FSH 1/92 for detailed advice on the level of supervision needed at particular premises, and to complaints from operators that, despite the flexibility offered by Circular FSH 1/92, their local authorities intended to impose full-time veterinary supervision after 1 January 1993, Ministers had decided to issue further guidance to local authorities on supervision of premises. Local authorities were reminded that the official veterinary surgeon was required to carry out ante-mortem inspection of all animals. Ministers recommended that local authorities should base decisions on the level of veterinary attendance primarily on the throughput of the abattoir. An attached annex gave details of the recommended levels of supervision. The annex specified that for abattoirs handling more than 600 livestock units per annum the official veterinary surgeon was required to carry out the ante-mortem inspection and to allocate sufficient time to supervision of other aspects of the operation of the premises. The recommended total time for official veterinary surgeon attendance at a premises, expressed as a percentage of the normal operating time at the premises, was 30% for premises handling 601 to 15,000 livestock units, 50% for those handling 15,001 to 30,000 units, and 100% for those handling more than 30,000 units. Local authorities had discretion to adjust attendance by plus or minus 10% depending upon the risk factors; they should take full account of the views of the official veterinary surgeon in deciding whether to exercise their discretion. On 24 November the then Minister's Private Secretary confirmed that the Minister was content with the proposals and the draft circular. On 26 November MAFF were informed that the Member who had secured the adjournment debate had given notice that he would seek to bring in a Bill on the subject. On 30 November MAFF published the draft circular, with some amendments, as Circular FSH 4/92.

Efficiency scrutiny report

31. In July 1993 the then President of the Board of Trade published an efficiency scrutiny report, "Review of the Implementation and Enforcement of EC Law in the UK". Annexed to that report was a case study of the implementation of Directive 91/497/EEC. An extract from the case study is reproduced at Annex B.

MAFF's comments on the complaint

32. In his comments on the complaint the then Permanent Secretary said that the European Commission's action in May 1998 (paragraph 1.12) did not alter the fact that Circular FSH 4/92 had been issued following proper consideration of all the issues involved. He did not consider that Mr N had been disadvantaged in any way as a result of the then Government's actions.

33. The Permanent Secretary explained that Ministers had been aware of the burdens which would be placed on the industry by the introduction of veterinary supervision. It had been the intention that local authorities should use a high degree of flexibility to operate a meat inspection service appropriate to the needs of individual plants; Circular FSH 1/92 had given guidance to that effect. However, during the autumn of 1992 it had become clear that local authorities were planning to put in place widely varying levels of supervision, and many were intending to impose full-time supervision regardless of the size and hygiene standards of the plant. Ministers had agreed that full-time supervision would place a disproportionately heavy financial burden on smaller plants. In order to ease that burden and ensure a greater consistency across different local authorities, Ministers had decided to issue further more specific guidance in the form of Circular FSH 4/92. That guidance had thus been issued for the benefit of the industry.

34. The Permanent Secretary said that Ministers had been aware that the levels of supervision recommended by Circular FSH 4/92 were not those required by the 1991 Directive. However, although under the Circular only 139 out of the 605 abattoirs in England and Wales would receive full-time veterinary supervision, those plants processed 75% of the total throughput. In any event, it would have been impossible to achieve full-time supervision in all abattoirs. Having regard to the history of veterinary supervision in the United Kingdom, the costs to industry and the resources available to local authorities, the decision to target veterinary resources in that way had been a reasonable one. The implementation of European requirements for veterinary supervision was a difficult and complex policy area. Decisions had to be taken which struck the right balance between the protection of public health, costs to industry, and consistency with the law. In implementing the 1991 Directive the then Government had aimed to make a balanced judgment on the levels of supervision required to protect the consumer and avoid over-burdening an industry which was operating on extremely small profit margins and investing heavily in structural improvements to upgrade to European standards. The fact that the European Commission had subsequently found that the United Kingdom's arrangements were not in conformity with the law did not change MAFF's conclusion that a considered decision had had to be made at the time and that the decision reached had provided the levels and frequency of supervision needed for the effective protection of public health while having regard to the resources available for that purpose.

35. The Permanent Secretary said that he did not consider that the guidance issued in Circular FSH 4/92 had in any way prevented Mr N from carrying on his business. Mr N had been treated no differently from other businesses and had at all times been given the best advice possible. Of 400 or so abattoirs in Great Britain which had agreed to carry out structural upgrading programmes, the vast majority had completed the work. The closure of Mr N's abattoir for a substantial period had been a commercial decision by Mr N, which had resulted in him losing existing and potential new business at a time when other operators had remained in business to finance their structural upgrading programmes.

Findings

36. I have seen no evidence that MAFF misunderstood the requirements of Directive 91/497/EEC as regards the level of veterinary supervision in abattoirs. Rather, over time they knowingly and deliberately changed their guidance on the application of the Directive, from exhortations to the effect that it would need to be applied in full, to an instruction that it should be applied as fully as local authorities judged reasonably practicable (in Circular FSH 1/92 issued in September 1992 - paragraph 1.23 above), to a recommendation that its application should be less than full in a significant proportion of cases (in Circular FSH 4/92 issued in November 1992 - paragraph 1.30). MAFF recognised from the outset that shortage of veterinarians would make immediate full application of the Directive difficult, and that the costs of full application would cause a number of small abattoirs to close. MAFF also knew that only full application would meet the United Kingdom's obligations under the Directive. The question is whether in departing from that position, even in the face of the difficulties they foresaw, MAFF acted maladministratively, given that they knew that to do so would be to breach the requirements of the Directive.

37. Insofar as the changes in MAFF's position were intended to accommodate insoluble practical difficulties in the short term stemming from a shortage of veterinarians, I note that in 1998, in response to the European Commission's conclusion that the United Kingdom had failed fully to apply the requirements of the Directive, MAFF proposed to increase veterinary supervision to the required level in incremental stages. That ought it seems to me also to have been the approach adopted to the practical difficulties that were evident in 1992. I note the conclusion of the efficiency scrutiny report that delay by the United Kingdom in implementing the Directive would have carried a risk for the competitiveness of the industry (Annex B paragraph 4.17). It seems to me reasonable therefore for MAFF to have taken the view that for the United Kingdom to be presented as in principle undertaking full implementation of the Directive was to everyone's advantage, even if, in practice, initially that might not fully have been possible. (The corollary would be that the United Kingdom was doing all it reasonably could to make it possible within a realistically short time scale.) I consider therefore that it was reasonable for MAFF to have issued Circular FSH 1/92, or guidance to similar effect, in the way that they did insofar as the purpose was simply to help effect the practical introduction of the new requirements in operational terms without sacrificing the principle of compliance with the Directive. In the circumstances I make no criticism of MAFF for the position adopted and promulgated in Circular FSH 1/92.

38. I turn next to the issue of Circular FSH 4/92. The evidence from MAFF's files suggests that that Circular was issued because MAFF wished to make sure that, quite apart from any practical constraints imposed by the shortage of veterinarians, local authorities would not impose the requirements of the Directive in full upon all abattoirs. That desire stemmed from a recognition that such an imposition would lead to abattoir closures and a judgment that a concession aimed at avoiding closures would be needed in order to ensure the smooth passage through Parliament of the relevant regulations. In effect, Circular FSH 4/92 represented an attempt to modify the rigours of the Directive and the relevant regulations so as to avoid creating too many "hard cases", and thus to eliminate the difficulties to which the prospect of such cases had begun to give rise. In making that attempt the Circular deliberately departed from the requirements of the legislation which it purported to outline, and it risked disadvantaging consumers in general and those abattoir operators who had by then already taken steps to comply with the concepts of the Directive. In those respects the promulgation of Circular FSH 4/92 was clearly wrong and I consider that MAFF were maladministrative in issuing it.

39. The issue then is what injustice if any was Mr N caused by the issue of Circular FSH 4/92? As Mr N has acknowledged, the business decisions to stop his existing operations in August 1992, but then some time after November 1992 not to proceed with his expansion plans, were taken by him. Nevertheless, the decisions he took would have been influenced to a considerable extent by the statements being made by MAFF on the perceived required level of veterinary supervision in abattoirs. Those operators such as Mr N who had made decisions and incurred expense in the light of MAFF's earlier position, and who then abandoned or revised them in the light of MAFF's later statement, can legitimately claim to have been led to believe (falsely as it has turned out) that the investments they had made and the expenditure they had incurred had been wasted - a point which MAFF officials made clear to Ministers at the time (paragraphs 1.25 and 1.26). Paradoxically it will have been the abandonment of that presumed wasted expenditure which will have been the real waste - an abandonment in Mr N's case which the maladministrative promulgation of circular FSH 4/92 effectively caused. The approach which I consider correct is that a person who has suffered injustice as a result of maladministration should, as far as possible, be put back in the position he or she would have been in had the maladministration not occurred. Mr N's decision to stop his existing operations in August 1992 was taken before Circular FSH 4/92 was issued and the consequences of that decision must lie at his own door. However, I put it to the present Permanent Secretary that, in the circumstances, it would be right for MAFF to reimburse Mr N for the actual expenses he had incurred and wasted in relation to his expansion project because of his subsequent abandonment of those plans. Following further discussion, the Permanent Secretary agreed. He said that the Food Standards Agency, which from 1 April 2000 had taken over from MAFF responsibility for meat hygiene, would contact Mr N and invite him to produce evidence of the expenses he had incurred and wasted. The Agency would also take steps to identify and compensate others similarly affected.

Conclusion

40. MAFF did not misinterpret Directive 64/433/EEC but nevertheless issued incorrect guidance on the subject which caused Mr N financial loss. They have agreed to reimburse that loss and take steps to identify and compensate others similarly affected. I regard that as a satisfactory outcome to Mr N's justified complaint.

Annex A – REPORT BY THE OMBUDSMAN'S PREDECESSOR ON MR N'S EARLIER COMPLAINT

Annex B – EXTRACT FROM THE EFFICIENCY SCRUTINY REPORT CHANGES IN POLICY

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Last updated: 4 April 2005