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Assessment of the Provision of Marine Aids to Navigation Around the United Kingdom & Ireland > Final Report March 2010

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Assessment of the Provision of Marine Aids to Navigation Around the United Kingdom & Ireland > Final Report March 2010 Final Report Assessment of the Provision of March 2010 Marine Aids to Navigation around the United Kingdom & Ireland > Photo courtesy of CIL 2 Assessment of the Provision of Marine Aids to Navigation around the UK and Ireland Final Report The Project Team and Steering Group Steering Group This Assessment was undertaken by a team from Atkins and The Assessment was overseen by a Steering Group chaired by Drennan Marine Consultancy. the Department for Transport (UK) with representatives from the Department of Transport (RoI), three General Lighthouse Core Team and Thematic Leads Authorities and Lights Advisory Committee. Assessment Director: John Stephens This Report Assessment Manager: Louise Coward This Final Report was produced by Atkins Limited, in association AtoN Provision and Operations: Tom Drennan with Drennan Marine Consultancy Ltd, for the Department for Transport (UK) and the Department of Transport (RoI) for the GLA Governance and Efficiency: Jonathan Spear specific purpose of the Assessment of the Provision of Marine Charging and Light Dues: John Stephens Aids to Navigation around the UK and Ireland. General Lighthouse Fund: Malcolm Summerfield Atkins and Drennan marine Consultancy accept no liability UK and Ireland: John Stephens for any costs, liabilities or losses arising as a result of the use of or reliance upon the contents of this report by any person Advisors and Support other than the Department for Transport or the Department of David Meikle Transport. Hilary Gowen Paul Wellings Jill Clancy NUMBER: 5088505 DOCUMENT REF: FINAL REPORT 1 Final for Publication JHS/JBS/TD/MS LC JHS JBS 15/03/10 Version Purpose Description Originated Checked Reviewed Authorised Version Date Photo Front Cover: Hanois by Tim Harvey 3 Photo courtesy of CIL Contents and Glossary > Contents Section Page Glossary 11 Executive Summary and Acknowledgements 13 Foreword 19 1. Background to this Assessment 23 1.1 Introduction 24 1.2 Context and Aims of the Assessment 25 1.3 Committed Changes 26 1.4 Structure of this Report 26 2. Overview of Arrangements for Provision of Aids to Navigation in the UK & Ireland 29 2.1 The Current Structure 30 2.2 The General Lighthouse Authorities 32 2.3 An Overview of the Costs of Providing AtoN 37 2.4 Light Dues 40 2.5 The General Lighthouse Fund 42 2.6 The Draft Marine Navigation Bill 43 3. Views from Stakeholders 45 3.1 Introduction 46 3.2 Shipping Lines 46 3.3 Ports 47 3.4 Users 48 3.5 Summary of Stakeholder Engagement 49 4. Experience Elsewhere 51 4.1 Overview 52 4.2 Observations from the Case Studies 55 Contents 6 Contents Section Page 5. The Technical Basis for the Specification and Provision of Aids to Navigation 57 5.1 Introduction 58 5.2 The Legislative Background 58 5.3 IALA Standards 61 5.4 Defining AtoN Needs and the Role of AIS 62 5.5 Developing Systematic Methods for Appraisal 65 5.6 AtoN Needs in the Context of E-Navigation 67 5.7 GLA Fleet Requirements and Operations 70 5.8 Shore Support and Infrastructure 71 5.9 Shore Capacity 72 5.10 Local and Third Party Aids to Navigation 74 6. Governance, Efficiency and Synergy 79 6.1 Overview 80 6.2 GLA Organisational Structures 83 6.3 GLA Staffing 91 6.4 GLA Cost Control 94 6.5 Future Synergies and Efficiencies 99 6.6 Commercial Income 113 6.7 Conclusions 117 7. Charging for Aids to Navigation 119 7.1 Background 120 7.2 Are Light Dues a Charge or a Tax? 121 7.3 Applying Principles of Proportionality to Taxation 126 7.4 The Present System of Light Dues in the British Isles 131 7.5 Possible Variations to the Cost Recovery System 137 7.6 The Banded or Multi-Day System 145 7.7 Impacts on shipping and the economy 146 7.8 Extending Coverage of the System 150 7.9 Conclusions 153 Contents 7 Contents Section Page 8. The General Lighthouse Fund 157 8.1 Introduction 158 8.2 Financial Performance 158 8.3 Investment Funds Management 161 8.4 Pension Structure and Management 166 8.5 Stakeholder Engagement and the GLF 171 8.6 Towards a Strategy for the General Lighthouse Fund 172 9. The Relationship between the United Kingdom and Ireland 179 9.1 The Underlying Problem 180 9.2 Alternative Perspectives 189 9.3 Aims and Objectives 191 9.4 Developing a Strategy 192 9.5 Addressing Cost Reduction & Revenue Generation 196 9.6 Longer term options 203 9.7 Conclusions 204 10. Addressing Long-Term Fundamentals 207 10.1 Introduction 208 10.2 The UK and Ireland 209 10.3 Inter-GLA Working 213 10.4 The Case for Structural Change 214 10.5 The General Lighthouse Fund 215 10.6 Increasing Scrutiny of Expenditure Proposals 216 10.7 Future Role of the European Union 219 11. Conclusions and Recommendations 221 11.1 Overview 222 11.2 Short-Term Recommendations 222 11.3 Longer-Term Considerations 244 Appendices 247 Contents 8 Contents List of Tables Page Table 2.1 Recent and Future Changes in Light Dues 41 Table 4.1 AtoN Funding Regimes across IALA Member States 52 Table 5.1 IALA Standards for AtoN Availability 61 Table 5.2 Utilised and Spare Capacity within GLA Buoy Yards 72 Table 6.1 Benefits and Costs of the Tri-GLA Structure for the UK and Ireland 82 Table 6.2 Comparison of GLA Staffing and Structures 2009/10 83 Table 6.3 GLA Headcount – Full-Time Equivalent – 2007/08 and 2008/09 91 Table 6.4 GLA Headcount, 2004/05-2008/09 91 Table 6.5 GLA Support Services Headcount – Full-Time Equivalent 2009/10 92 Table 6.6 GLA Running Costs, 1999/00 to 2008/09 94 Table 6.7 GLA Operating Cost Breakdown 2007/09 and 2008/09 95 Table 6.8 Costs of GLA Senior Management 96 Table 6.9 GLA Projected Running Costs 2008/09 – 2012/13 97 Table 6.10 Current GLA Common Procurement 111 Table 6.11 GLA Commercial Income by Income Stream 2005/06 to 2008/09 (£000s) 114 Table 6.12 Trends in Commercial Income by GLA 2005/06 to 2009/10 (£000s) 115 Table 7.1 Effects of Discounts between Bands 142 Table 8.1 General Lighthouse Fund – Income and Expenditure Statements (£000) 159 Table 8.2 General Lighthouse Fund – Debtors (£ Million) 160 Table 8.3 Investment Funds – Annual Performance 2006 – 2009 (£000) 163 Table 8.4 Investment Fund Managers – Performance from Contract Inception 164 Table 8.5 Pension Forecasts by GLA in Nominal and Real Prices: Central Assumptions 167 Table 8.6 Pension Arrangements Comparison – Funded and PAYG Provisions 169 Table 9.1 Number and Values of Light Due Certificates Issued 185 Table 9.2 Distribution of Payments by Source 187 Table 9.3 Incentivised Structure for GLF Contributions 192 Contents 9 Contents List of Figures Page Figure 1.1 Territorial Coverage of the GLAs for the UK and Ireland 27 Figure 2.1 Overview of the Provision of Aids to Navigation in the UK and Ireland 31 Figure 2.2 GLA Operating and Other Costs 1998/99 to 2008/09 37 Figure 2.3 Trends in GLA Operating Costs 2004/05 to 2008/09 38 Figure 2.4 GLA Capital Expenditure (Current Prices) 1991/92 to 2008/09 39 Figure 2.5 UK Light Dues Compared to Retail Price Index 1991/92 to 2008/09 40 Figure 7.1 Charge per Ship per Day 128 Figure 7.2 Charge per Ship-Day per 1000 Tons 129 Figure 7.3 Index of Dues per Ship-Day 132 Figure 7.4 Dues per Ship-Day per Ton 133 Figure 7.5 Flat Rate and Capped System: Charge per Ship Day 135 Figure 7.6 Comparison of Flat and Cap Systems – Charge per Ship Day per Ton 136 Figure 7.7 Taper System for Calls 140 Figure 7.8 Alternative Taper Systems 140 Figure 7.9 Multi-Day System with Alternative Discounts between Bands 143 Appendices A Stakeholder Engagement 248 B Further Technical Background on Light Dues and Charging 249 Contents 10 Glossary Glossary AtoN - Aids to Navigation JSB - Joint Strategic Board AIS - Automatic Identification System LAC - Lights Advisory Committee CBA - Cost-Benefit Analysis LFC - Lights Finance Committee CEA - Cost-Effectiveness Analysis LLA - Local Lighthouse Authority CIL - Commissioners of Irish Lights MANT - Medium Aids to Navigation Tender CIPFA - Chartered Institute of Public Finance MCA - Maritime and Coastguard Agency and Accountancy (UK) DfT - Department for Transport (UK) MFT - Multi-Function Tender DoT - Department of Transport (Republic of MNB - Marine Navigation Bill Ireland) MSA - Merchant Shipping Act(s) eLoran - Enhanced Loran NLB - Northern Lighthouse Board FPM - Financial Planning Model (GLF) NLV - Northern Lights Vessel FSA - Financial Services Authority NRT - Net Registered Tons FTE - Full Time Equivalent ORF - Operating Reserve Fund (GLF) GAD - Government Actuary’s Department PAYG - Pay As You Go GLA - General Lighthouse Authority PCF - Pension Contribution Fund (GLF) GLF - General Lighthouse Fund PPM - Pension Planning Model (GLF) GNSS - Global Navigation Satellite System PRP - Performance Related Pay GPS - Global Positioning Satellite R&RNAV - Research and Radio Navigation GRT - Gross Registered Tons RNLI - Royal National Lifeboat Institution IALA - International Association of Marine RoI - Republic of Ireland Aids to Navigation & Lighthouse Authorities RYA - Royal Yachting Association IFRS - International Financial Reporting SOLAS - Safety of Life at Sea Convention Standards (1974) IGC - Inter-GLA Committee STCW95 - Standards of Training, Certification and Watchkeeping ILDF - Independent Light Dues Forum TH - Trinity House ILV - Irish Lights Vessel THV - Trinity House Vessel IMO - International Maritime Organisation TSS - Traffic Separation Scheme ISM - International Safety Management Code TUPE - Transfer of Undertakings (Protection of Employment) JCG - Joint Consultative Group VfM - Value for Money Glossary 11 Flannan Isles by Peter Christmas Executive Summary and Acknowledgements > Executive Summary Introduction This Assessment In September 2009, the Department for Transport (DfT) and the The overall aim of this Assessment is to ensure that the GLAs Republic of Ireland Department of Transport (DoT) appointed continue to be “European and World Leaders in delivering a Atkins to undertake an independent Assessment of the reliable, efficient and cost effective AtoN service for the benefit Provision of Marine Aids to Navigation (AtoN) around the UK and safety of all mariners in the medium- to longer-term with and Ireland.
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