GDC consults on methods of setting ARF

GDC consults on methods of setting ARF

The GDC has opened a consultation, which runs until May 15, on a new way on setting their fees. The GDC stresses that this is a consultation about the mechanisms for setting fee levels rather than about the level of fees themselves. Details are how to respond can be found on the GDC website

The proposed policy aims to better explain how and why funds are used, to be clearer about how we allocate costs and to provide more certainty about the level of fee registrants can expect to pay. Their approach is based on around three main principles:

·         Fee levels should be primarily determined by the cost of regulating each registrant group: we will seek to minimise the ways in which registrants fund regulatory activity that is not generated by them by removing, as far as practicable, cross subsidy between different groups. We will do this by allocating costs, as far as possible, where they fall. Where a degree of cross subsidy is necessary, we will explain this through our policy.

·         The method of calculating fee levels should be clear: we will be open with registrants about how we allocate the income we receive from them and why, and provide sufficient information about cost drivers, giving them the opportunity to contribute to the debate. We will seek to show a clearer link between fee income and regulatory activity. ​

·         Supporting certainty for registrants and the workability of the regulatory framework: we need to make sure that decisions on the allocation of costs do not lead to undesirable outcomes in the form of unacceptably high or variable costs for some groups of registrants. For example, in determining whether cross subsidy is necessary or desirable we will need to consider the impact on the volatility of fee levels (i.e. how much small changes in workload would cause the fee to change). This is likely to be of particular relevance to small registrant groups, where distribution of costs among small numbers of rgistrants has the potential to give rise to significant levels of volatility (and therefore uncertainty) and/or prohibitively high fees.

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