September 2012

Background LACORS scheme published in 2004 to Address concerns about inconsistency of risking between authorities Rationalise existing discipline based risking to a single risk for a business Introduce a generic risk based on the nature of the business allowing for desktop risking Introduce alternative enforcement activities to advance the next due date A review of the 2004 scheme was led by an OFT facilitated working group and commenced with widespread consultation

Consultation Issues The scheme was inflexible with the local confidence element not allowing for a reduction in risk for a well managed business Resources required to meet the intervention frequencies determined by the scheme meant significant numbers of businesses were showing as overdue Authorities were moving to intelligence led enforcement and some were introducing lean systems thinking

Considerations Common approach to risk assessment BRDO have been represented on the group and have made significant contributions in terms of the structure of the scheme and defining the elements Food standards risk scheme FSA have been kept informed of progress and have provided comments on the compatibility with the Code of Practice within the guidance document Animal health risk Scheme The animal health risk scheme was based on the 2004 scheme however the smaller range of business categories means the main issue of inflexibility is not as great

Considerations Variations Within Trading Standards Authorities The group consisted of representative from England, Scotland and Wales and represented a range of different types of authority Resources The development of a new scheme had to balance the desire to achieve the most effective outcome with the resources available within authorities to implement it and undertake the risking National Trading Standards Board have been updated on progress and consulted on specific resource issues Software systems The scheme needs to be implemented on a range of software systems and the major suppliers have been kept informed of developments

The Revised Scheme In September 2012 the National Trading Standards Board accepted the proposed revised scheme which suggests the following bandings and frequencies Risk CategoryRisk BandRecommended Activity Frequency AHighAnnually B1Upper MediumTwo-yearly B2Lower MediumFive-yearly CLowNo recommended frequency UnratedAssessment required

Elements of the Scheme Hazard – “Anything with the potential to cause harm” A business’ hazard is assessed by 4 questions What is the maximum potential for harm to the public posed by the business To what extent do the activities of the business affect the hazard What volume and complexity of legislation does the business have to comply with How many consumers are likely to be affected by the business failing to comply

Elements of the Scheme Likelihood of Compliance (LOC) – “The likelihood that a business will achieve compliance” A businesses systems of risk management is assessed by a single question What confidence does the assessor have in the business’s control systems based on the previous and current compliance and knowledge of management’s systems of control Risk – “A function of the level of a hazard and the likelihood that the hazard will cause harm” Risk is determined by combining the Hazard and LOC

Risk Assessment Matrix

Key Changes The Likelihood of Compliance when combined with the hazard allows for the risk band to be lowered from the default business category risk Medium risk band has been split into upper and lower medium Recommended intervention frequencies for low risk businesses have been removed The business\trader types for agriculture have been completely revised to correspond to registration categories and businesses will need to be mapped accordingly

Significant Points The use of a specific LOC category of “Not yet assessed” allows for authorities to identify businesses where no assessment has been made The scheme allows for an authority to create additional business categories to meet local priorities or circumstances Areas of variance from the Food and Feed Codes of Practice are highlighted within the guidance document

Implementing the Scheme Details have been provided to the main software suppliers who will issue system specific guidance A spreadsheet to enable authorities to assess the impact of the scheme on their database has been issued with the guidance Authorities will need to determine when to implement the changes to ensure returns, reporting and planning are not adversely affected The working group will provide support to authorities during the implementation process and collate any issues or new business categories as they arise on a dedicated TSI Information Hub The working group has suggested that NTSB may wish to oversee a review of the scheme six months after it is implemented

Challenges The increased impact of the likelihood of compliance in the risk assessment brings the scheme closer to other regulatory risk assessments and with the work being carried out on a common approach may allow for effective sharing of information One issue raised in the initial consultation was the relevance of the risk scheme to businesses and the possibility a revised scheme may offer in engaging with them.