Closed consultation

Annex A: draft impact assessment outline

Published 19 March 2026

Applies to England, Northern Ireland and Wales

In line with the best practice the FSA will produce an impact assessment of the revised discount regime. This will be used to inform Ministers in making their final decision on the scheme and will be published when complete.

Based on information received to date from stakeholder discussions, data held by the FSA and research conducted by Riber Consultants, the FSA has monetised some impacts. The assessed costs are provisional, and the FSA is seeking additional evidence from industry to inform the final impact assessment of the total costs and benefits.

For the impact assessment we have considered three options:

• Option 1 (Baseline) – continuing with the banded model [with an ongoing trajectory towards full cost recovery]

• Option 2a – Tapering discount model with 1 year of input data

• Option 2b– Tapering discount model with 3 years of input data

There may be further additional options to explore within the Impact Assessment regarding the positioning of Threshold 2. Section 8 of this consultation sets out the rationale behind the threshold positioning. Potential variation includes placing Threshold 2 anywhere from two to three times Threshold 1 (the position at which growth is protected) to five times Threshold 1 which is estimated to be the position where regulatory burden is proportionate. Within this consultation, we have pursued the option that Threshold 2 is set five times the amount of Threshold 1.

Option 1 – Baseline - Continuing with banded model

The costs and benefits of Options 2a & 2b will be compared to the Baseline in the final Impact Assessment.

The baseline option will involve continuing with the current discount regime banded model .

Option 2a – Tapering discount model with 1 year of input data

Monetised Costs:

Costs to Businesses

Ongoing Cost in Reduced Discount amount to Abattoirs

It is estimated that abattoirs will incur ongoing additional costs via reduced discount allocation, as larger abattoirs will no longer be eligible for a discount, or face a reduced discount, on their Official Control hours. This will result in a reduction in the total discount amount and thus an increase in cost pressures on abattoirs under the revised discount system. This cost will be monetised post consultation as part of an Impact Assessment.

One-off Familiarisation Costs to Establishments

It is estimated that abattoirs will face a one-off familiarisation cost due to a need to familiarise themselves with the revised system of discounts.

In line with our standard methodology on the appraisal of familiarisation of new guidance; we will estimate the one-off familiarisation time by dividing the total word count of the updated Meat Charging Discount Guidance, including annexes, with the average number of words a person can read per minute, for a prose text (275 words per minute)^{[footnote 1]}.

We assume that the occupation of those familiarising themselves with the guidance will likely differ, depending on the size of the business. For smaller and medium sized abattoirs, where one individual often holds multiple responsibilities, we anticipate the individual to be a “Manager and Proprietor in Agriculture Related Services” ^{[footnote 2]}. Whereas for larger abattoirs, we assume the occupation to be a “Finance Administrative,” ^{[footnote 3]} and for two staff members to be responsible, per abattoir, for familiarisation.

To quantify and monetise the total one-off familiarisation cost to industry we will multiply the familiarisation cost per business by the number of abattoirs. This will result in an approximate one-off familiarisation cost to businesses in England, Wales and Northern Ireland. This cost will be monetised post consultation as part of an impact assessment.

Costs to Competent Authorities

The costs detailed below are costs incurred by the FSA as a result of the discount regime reform and will not be added to Official Control inspection charges.

One-Off Cost in Developing a New IT System to FSA England & Wales

FSA England & Wales has estimated an initial one-off cost of ranging between £100,000 to £300,000 to develop the IT platform that will administer the revised discount system. It is envisaged that a single IT system will be developed for FSA England & Wales by FSA staff and contractors.

One-Off Cost in IT System Training to FSA England & Wales

It is estimated that the FSA will incur one-off costs via IT system training, as FSA staff will need to be trained in using the new IT system developed for the revised discount system. To quantify and monetise one-off IT training costs to the FSA, in line with the Standard Cost Modelling (SCM) methodology, we calculate the labour cost per employee by multiplying the hourly wage rate, which includes non-wage costs and is sourced from FSA wage data, by the time required. This is then multiplied by the quantity of staff required from each group and summed across all employee groups to give the overall labour cost associated with training FSA staff in the revised discount system.

Given the IT systems early developmental phase, the total one-off cost to the FSA of IT training will be attained when the IT systems specification is fully known. It will represent the cost to the FSA for England and Wales. This cost will therefore be monetised post consultation as part of an Impact Assessment.

Developing a New IT System to DAERA Northern Ireland

The Northern Ireland discount system is administered by DAERA. The FSA estimate no additional costs will be incurred in developing and building a new IT platform to administer the revised discount system in Northern Ireland. This is because DAERA charges ongoing IT costs as part of overheads, with this work being considered business-as-usual.

One-Off Cost in Training staff in DAERA’s New IT System to FSA Northern Ireland

For Northern Ireland abattoirs, DAERA’s new IT system will be used to determine discount eligibility. Additional staff will therefore need to deliver and be trained in DAERA’s IT systems. Given IT system uncertainties, the total one-off cost to the FSA of training staff on DAERA’s IT system will be fully known once the IT systems specification has been clarified. This cost will therefore be monetised post consultation as part of an Impact Assessment.

One-Off Cost in Informing Abattoirs of Revised Discount System to FSA

It is estimated that the FSA will incur one-off costs of informing abattoirs of the revised discount system as FSA staff will need to draft, sign-off and send guidance, and a covering letter, to abattoirs.

To quantify and monetise the one-off staff costs to the FSA of drafting and signing off guidance on the revised discount system, in line with the SCM methodology, we calculate the labour cost per employee by multiplying the hourly wage rate, which includes non-wage costs and is sourced from FSA wage data, by the time required. This is then multiplied by the quantity of staff required from each group and summed across all employee groups to give the overall labour cost associated with drafting and signing off guidance and a covering letter for the revised discount system. The FSA will also incur labour and postal costs associated with sending the discount regime guidance to abattoirs. To quantify and monetise the one-off labour cost to the FSA of sending guidance and the covering letter, the SCM methodology will be used.

The plan for sector engagement is still in development and thus the total one-off cost incurred by the FSA will be monetised post consultation as part of an Impact Assessment.

Costs to Consumers

Impact on Consumers

The FSA assumes the direct impact on consumers to be negligible. Early findings from the external research, carried out by Riber Consultants, suggests that consumer impacts from changes to abattoir charging structures arise primarily through reduced product availability, not higher prices.

Monetised Benefits:

Benefits to Businesses

Ongoing Benefit in Reduced Admin Burdens to Abattoirs

It is estimated that there will be a benefit via a reduced administrative burden to receiving the discount, as the proposed tapering model is designed to be simpler and easier to interpret than the banded system. This cost has not yet been monetised; information is requested from industry, via the consultation survey, with a view to quantifying the cost.

Benefits to Competent Authorities

Ongoing Benefit in Reduced Administrative Burdens to FSA for England and Wales

It is estimated that the FSA will incur ongoing benefits via a reduced administrative burden in calculating England and Wales abattoir discounts, as the proposed tapering model is designed to be simpler and easier to interpret than the banded system.

To quantify and monetise ongoing administrative burden reductions to the FSA, the SCM methodology will be used.

Given the IT systems early developmental phase, the total ongoing benefit to the FSA of reduced administrative burdens in calculating abattoir discounts will be attained when the IT systems specification is fully known. It will represent the benefit to the FSA for England and Wales. This cost will therefore be monetised post consultation as part of an Impact Assessment.

Ongoing Benefit in Reduced Administrative Burdens to FSA for Northern Ireland

It is estimated that the FSA will incur ongoing benefits via a reduced administrative burden in calculating Northern Ireland abattoir discounts, as the proposed tapering model is designed to be simpler and easier to interpret than the banded system. This will be quantified and monetised in line with the SCM methodology adopted for England and Wales.

Given the IT systems early developmental phase, the total ongoing benefit to the FSA of reduced administrative burdens in calculating abattoir discounts will be attained when the IT systems specification is fully known. It will represent the benefit to the FSA for Northern Ireland. This cost will therefore be monetised post consultation as part of an Impact Assessment.

Benefits to Taxpayers

Ongoing Benefit in Reduced Discount amount to Taxpayers

It is estimated that the Taxpayer will incur ongoing benefits via reduced discount allocation, as larger abattoirs will no longer be eligible for a discount, or face a reduced discount, on their Official Control hours. This will result in ongoing taxpayer saving under the revised discount system.

Following confirmation of the discount models specification, FSA analysts and Finance partners can estimate the public sector financial cost and saving associated with the revised discount system. This cost will therefore be monetised post consultation as part of an Impact Assessment.

Wider Economic Impacts

The FSA envisages some wider economic impacts as a result of the changes to the discount regime. Examples include potential transportation costs to livestock owners, impacts on animal welfare and structural changes to abattoirs. These impacts will be expanded upon as part of the final Impact Assessment.

Option 2b – Tapering discount model with 3 years of input data

Option 2b is almost identical to Option 2a in terms of the discount mechanics and calculation of the discount awarded. The main difference is in regard to the throughput input data, under Option 2a, 1 year of data will be used to calculate the discount awarded, whereas in Option 2b, 3 years of data will be used.

Due to there being only a minor difference in the discount calculation method between the two options, the aggregate impact on industry and FSA is anticipated to be identical, i.e. the costs and benefits presented are identical for Option 2a and Option 2b.

1. Business Impact Target: appraisal of guidance: assessments for regulator-issued guidance. Department for Business, Energy and Industrial Strategy (2017). ↩

2. SOC code 1211 as defined in ASHE Table 14 (2025) ↩

3. SOC code 4129 as defined in ASHE Table 14 (2025) ↩