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Concern over inconsistent scrap metal dealer licence fees

A wide range in the fees that local authorities are charging for scrap metal licences has caused concern in the scrap industry.

Under the Scrap Metal Dealers Act (SMDA) 2013, local authorities in England and Wales have been given the power to set their own fees.

According to the law, which came into effect on 1 October, charges imposed in each local area must match the actual costs of the process to each authority, such as administration and assessment.

However, some councils are charging up to 10 times more than others for both site and collector licences. For example, Sefton council has set the level at £130 for a site operator, whereas Birmingham demands £1,335.

A sample of licence fees (see below) shows significant differences across the board. Some councils have yet to set their fees, which last for three years.

CouncilsSite licence feeCollector licence fee
Birmingham City£1,335£322
Oxford City£1,200£900
Bristol City£585£545
Kensington and Chelsea£516£192
West Oxfordshire£480£480
North East Derbyshire£230£215

(Data from council documents or websites)

Ian Hetherington, director general of the British Metal Recycling Association (BMRA), told MRW: “We wanted a single national licensing system and a single fee from the start – everybody wanted that – but, because of the European Service Directive, and then Treasury rules, we couldn’t have that.”

He said the fees were “supposedly for the same schedule of services” and he was surprised by the large range despite geographic differences. The BMRA concern was not the level of fees but rather the value for licence owners.

“If they pay £1,300 and the local authority is going to take no action against people who are providing unfair competition, then that’s very poor value. If they pay £1,300 and the local authority are crawling all over those people who aren’t falling into line and, if they are revoking licences of people who are found guilty of offences, then it is very good value indeed.”

Amy Bird, director at scrap metal dealer One Stop Recycling, told MRW: “It’s not uniform. There are different prices, which are way off the scale in various places. The London Borough of Newham is half the price of Birmingham City Council for a yard and it should be the same for everybody.

“It wasn’t meant to be a money-making scheme. It should be a regulation scheme.”

A spokesman for the Local Government Association said: “Local authorities are having to set fees that reflect the time spent assessing and administering applications and looking ahead to enforcement from December.

“Every council will have made an assessment of what is proportionate enforcement in light of their individual circumstances. This may mean that some are looking to carry out more inspections and other compliance activity than others.”

A Birmingham City Council spokesperson said: “We have used the same methodology to calculate scrap metal dealer fees as we use to calculate taxi driver licence fees. We calculate the time in minutes that every aspect of the licensing process takes, including compliance costs.”

BMRA research indicates that some councils “with the lowest fees have been working heavily with their local industry for some years and can therefore expect a largely compliant set of dealers already.”

Another issue around the new legislation is that collectors have to pay for a separate licence for each individual council area in which they operate.

An anonymous comment on the MRW story covering the SMDA coming into force said: “Shambles. Collectors in my city will have to have nine separate licences to cover their usual route. Should be one licence per local authority i.e. per shire. Leicestershire, Nottinghamshire, Warwickshire, etc.”

Mark Schofield, director of scrap metal dealer JB Schofield, claimed that the rule will make it very difficult for itinerant traders to do business.

Readers' comments (1)

  • What scope does the licenses include. e.g. Does the Oxford fee of £900 cover all boroughs and districts? To be fully covered in Leicester you have to pay £319 for City to ring road + 7 * £175 for boroughs past ring road so total of £1544 to be a mobile collector.

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