BMF Response to the DVLA Consultation on Fees

Published on 5 August 2013 by Gill

The BMF accepts the requirements for the Driver and Vehicle Licensing Agency to undertake certain actions which will have cost implications and the imperative for Executive Agencies to be self-financing. However, the DVLA's approach in financing these measures gives cause for concern and we recommend that other avenues for obtaining finance should be explored. We submit the following comments relating to the rationale set out in the consultation document. 



• There appears to be a preoccupation with replacing paper driving licences with photocard driving licences with references made to the draft Third EC Driving Licence Directive. At this stage, the draft directive is in a state of flux particularly with regard to some of the information to be included on the driving licence. In any instance, it has not been proposed to implement the directive until 2011 so we suggest that the DVLA is being somewhat premature in trying to pre-empt the final form of the directive. 
• We question whether a general move to photocard driving licences is negated by the fact that paper counterparts remain necessary and are often required to be presented with the licence. Perhaps the DVLA should seek means of eliminating this counterpart with commensurate savings in its administration before considering changes to licensing fees. 
• A concern to driving licence holders (particularly motorcyclists) relating to the replacement of paper licences is a lack of confidence with the accuracy of DVLA's records of the classes of vehicles to which individuals are entitled to drive. Instances of licences with motorcycle entitlement being replaced with it missing have been brought to our attention with the result that we now recommend anyone submitting their licence for replacement to take a photocopy and, ideally, obtain an affidavit from a police officer or a Justice of the Peace. We strongly recommend that DVLA should restore the confidence of paper driving licence holders before embarking on a campaign to replace them. 
• References have been made to streamlining services and internal systems at the DVLA. Have the anticipated savings from these measures been taken into account in the proposed restructuring of the fees structure? 
• The BMF has voiced concerns over the first registration fee since its introduction. As a general principle, we consider that the financing of the necessary bureaucracy in maintaining vehicle records should not be the responsibility owner. Since DVLA collects VED on behalf of HM Treasury and the maintenance of appropriate records to do so, the Treasury should fund its work either in the form of a commission or a flat rate to cover the DVLA's costs. We also consider that if the first keeper must pay the First Registration Fee, then the DVLA should take into account the relationship between the class of vehicle and the disposable income of its owner. It is contrary to social justice to levy the same fee for a moped as for a luxury car. Instead, it should be linked to the vehicle taxation class which has been established through both motorcycle engine capacities and car CO 2 emissions. 
• In recent years the DVLA has become more draconian in its enforcement of VED levying fines, back tax and confiscating vehicles which can be sold at auction. In addition with continuous registration, a rigid and automated system of imposing fines for simple oversights as well as deliberate avoidance of correct registration has been implemented. Since these measures not only cover the costs of enforcement but raise revenue, we suggest that they are employed in helping to fund the DVLA's work 
• The DVLA claims that much of its work is in maintaining an accurate record of drivers and vehicles. Yet there are many questions as to its accuracy. If there is to be confidence in the imposition of additional fees to the driving public, an undertaking should be given that this revenue will be used to bring that accuracy up to acceptable levels. 
Principles of the Fee Proposals 
The BMF has a number of concerns regarding the principles set out in the consultation.



Encouragement for drivers to join the licensing and vehicle registration system 

• Taking training and testing will not be encouraged by the universal use of photocard driving licences but by more accurate records accessible for enforcement purposes. Photocard licences can readily be forged and, besides, there are now few police officers involved in traffic duties available to inspect them. 
• New drivers and riders in particular are more likely to be deterred from following the correct procedures in obtaining a full driving licence by the complexity of procedures involved and the cost of insurance than the relatively small cost of a driving licence. While ‘every little helps' this is not considered to be the main factor. 
Disqualified drivers bearing the cost of licence administration 

• The BMF supports the principle that perpetrators should pay. 

Notification of medical conditions 

• The BMF agrees that honesty should not be penalised by the imposition of a fee to make a declaration. We consider that waiving fees is conducive to better compliance. 
Vehicle keepers' sharing in the funding of the registration system 

• The BMF fundamentally disagrees with this principle. As stated above, if the DVLA acts as an agent in collecting VED for HM Treasury, then it should fund this work through either a commission or agreed fee. If the DVLA is providing services to the Home Office in improving security and the Department for Transport in improving road safety, then they should be billed for these services. 
• The revenue raised from enforcement should be used to fund the registration system.
• The BMF regards the First Registration Fee as inequitable as stated above but reminds the DVLA that it was introduced to fund the maintenance of vehicles' records during their life. We, therefore, disagree with the principle that subsequent registered keepers should financially contribute to this process. 
Individuals bearing the cost of duplicate or replacement documents 

• The BMF supports the principle that drivers and keepers who safeguard their documents should not subsidise those who do not. 
Simplification of the fees structure 

• We support the principle of simplifying not only the fees structure but also the means of making payments such as by credit card. However, a restructuring exercise should not disguise any fee increases and savings in administrative costs should be passed on to the ‘customer'. 
Options for new fees structures – general 


The BMF has set out its view of the general principles associated with the proposed fees structures. Our view of the rationale of the options is as follows: 



• Renewal of photocard licences under the 10-yearly cycle instituted 
If a photocard system is in place, then clearly photographs need to be renewed periodically to reflect changes to the licence holder's appearance. This principle is well established for passports. 

• Provision of photocard licences under a paper licence recall initiative 
The BMF questions whether this is necessary at this stage when the licensing provisions of the Third EC Driving Licence Directive are still to be resolved and its implementation is several years away. 

• Registering keeper changes on sale of vehicles in a similar way to registration of new vehicles as currently operated 
We can see no need for this since it is likely to entail more work than merely inputting new details into an existing record. Neither do we consider that charging a fee for doing so can be justified. 

• Maintaining the vehicle register entries for an annual basis 
While doing so may be a useful check on vehicle ownership to enhance the accuracy of the database, this does not constitute providing a service and hence, the DVLA should not be holding vehicle keepers responsible for doing so by imposing a charge. 

Option 1 

Ten-year photocard licence renewal: The exercise should be undertaken at a fee to cover the costs of administration. This is currently the case with passports. Hence the existing £19 fee is acceptable. 



Paper driving licence recall: Holders may not wish to surrender their paper driving licences and, in principle should not be required to pay for the privilege. However, a photocard driving licence is becoming increasingly useful as a means of identification so a fee of £5 to help offset the costs of administration is regarded as acceptable. As claimed, it is a one-off exercise. 



Change of keeper fee: The prospect of being liable to pay £7.50 (or any fee) in addition to the purchase price of a new vehicle is not acceptable. Such administration should be funded as discussed above. There is also the added complication of who will actually be required to make the payment since, if the vendor is to pass on liability for the vehicle to the purchaser, the onus will be on him to make the payment to ensure that the vehicle is properly registered to the purchaser. The imposition of a fee is likely to be a deterrent to greater compliance. 



First registration fee: While a reduction from £38 to £30 may be welcome, the BMF recommends that the first registration fee is set according to the taxation class of the vehicle or, better still, the record keeping is funded by HM Treasury for whom the DVLA collects VED. 



Driving licence fees: Abolishing the fee for first driving licences for under 21 year olds is only likely to be of marginal benefit since other costs such as insurance, driving tests and, for motorcyclists, Compulsory Basic Training and pre-test training will be much higher. However, for individuals previously victims of social exclusion who are taking advantage of Wheels 2 Work schemes, this may be a significant benefit. We question how DVLA considers motorcyclists of under 21 to be subject to the magnitude of the problems that it claims. A cost of £30 for a first licence and renewals for over 21s does not appear to be excessive. 


Option 2 
Paper driving licence recall: Holders may not wish to surrender their paper driving licences and, in principle should not be required to pay for the privilege. However, a photocard driving licence is becoming increasingly useful as a means of identification so a fee of £5 to help offset the costs of administration is regarded as acceptable. As claimed, it is a one-off exercise. 



Change of keeper fee: The prospect of being liable to pay £7.50 (or any fee) in addition to the purchase price of a new vehicle is not acceptable. Such administration should be funded as discussed above. There is also the added complication of who will actually be required to make the payment since, if the vendor is to pass on liability for the vehicle to the purchaser, the onus will be on him to make the payment to ensure that the vehicle is properly registered to the purchaser. The imposition of a fee is likely to be a deterrent to greater compliance. 



Driving licence fees: Abolishing the fee for first driving licences for under 21 year olds is only likely to be of marginal benefit since other costs such as insurance, driving tests and, for motorcyclists, Compulsory Basic Training and pre-test training will be much higher. However, for individuals previously victims of social exclusion who are taking advantage of Wheels 2 Work schemes, this may be a significant benefit. A cost of £30 for a first licence and renewals for over 21s does not appear to be excessive. 



Ten-year photocard licence renewal: As stated above the BMF has no objection to the £19 fee in line with the principle of the periodic renewal of passports. We would not wish to see it subsidised by additional fees associated with vehicle registration. 



Annual (re-)Registration Fee: The principle of imposing such a fee, even at £2.50, is totally unacceptable. Once the principle of a re-registration fee is accepted, it could be abused with it used as a source of revenue and sums involved subject to increases. In addition, the payment of this fee when submitting a Statutory Off-Road Notification, will cause hardship for individuals with a collection of old vehicles, particularly motorcycles which are readily accumulated or those who cannot afford to tax their vehicles. 

First registration fee: A reduction from £38 to £25 would only be of marginal benefit and offset by the inconvenience of the annual (re-)registration fee. Our comments about setting the first registration fee according to the taxation class of the vehicle or, better still, the record keeping is funded by HM Treasury for whom the DVLA collects VED still apply. 

Option 3 
The options common with Option 2 are dealt with in the preceding section. 

Paper driving licence recall: While removing the fee for doing so may be welcome, the cost to the individual remains low and is a one-off. Compensating for it from vehicle registration-related fees is not acceptable. 

Annual Registration Fee: The BMF is opposed to the principle of imposing such a fee and certainly opposed to an increase from £2.50 in option 2 to £3. 

First Registration Fee: A reduction to £28 is a marginal benefit. We maintain our recommendation of rates related to vehicle taxation class or alternative funding. 

Option 4 
This is the least acceptable of the options to the BMF. We believe that charges to cover the costs of 10-year renewals of photocard licences and paper licence recalls are acceptable. Free provisional licences for under 21s is of marginal benefit as explained above. We are opposed to subsidies from the registration scheme. 

Change of keeper fee: This is not acceptable in principle or at a cost £7.50. 

Annual Registration Fee: The principle is not acceptable and an increased cost to £4.50 is certainly unacceptable. 

Conclusion 
Any option which imposes costs for transfer of ownership, annual registration or first registration fees is unacceptable. The least unacceptable is, therefore, Option 1 and the most unacceptable is Option 4. 



The BMF suggests a rethink in how vehicle record keeping is funded as suggested throughout this document. Suggestions are being made about road pricing which could ultimately replace VED and fuel duty. DVLA should seek to net off sufficient revenue from the source of vehicle-related tax gathering to fund its activities rather than impose fees on vehicle keepers. 



Trevor A Magner 

November, 2004 

Last reviewed/updated 5/11/04