AHDB sends grower levy payers final demand with £10.6m wind down costs identified
9 November 2021, by Matthew Appleby
AHDB has written to levy payers, who voted to end paying the levy in February 2021 with a 2021 levy invoice/estimated invoice.
AHDB said: “We expect this to be the final year of the statutory AHDB horticulture levy, subject to a decision by ministers. It has been calculated on a reduced levy rate of 0.27% on your adjusted sales figure (down from 0.45% last year).
“Following the ballot of horticulture levy payers earlier this year the AHDB Board has been in communication with government ministers and has taken the decision to completely wind-down our statutory levy-funded horticulture operations. We understand that government will launch an industry consultation later this year [mid-November] on proposed changes to the legislation that governs AHDB and on future options.
“The levy funds collected in this year, together with sector reserves, will be used to cover the costs of winding- down all levy-payer activity in the horticulture sector: to see out existing contractual liabilities including research programmes, so the value of levy already invested is not lost (£7.4 million) to cover the costs of lease commitments and staff redundancies (£1.4 million) at Defra’s request to fund a transitional EAMU/emergency authorisation service in 2022/23, so benefits are not lost for the industry and to enable time for the service to potentially be transferred to a third party (£1.8 million).
“For AHDB Horticulture it will cost in total around £10.6 million to meet all the liabilities through the planned transition of activities and the wind-down process. AHDB Horticulture reserves at 31 March 2021 were £6.05 million (subject to audit). The reduced 2021/22 levy rate is expected to raise £4.55 million.
“AHDB will remain legally required to pursue all overdue levy payments and any debtor that refuses to pay will be pursued through the legal process. Any excess funds at the end of the wind-down process will be held for a period of up to 6-years to fund any residual horticulture liabilities which may arise. After this period the utilisation of any funds remaining would be discussed with the industry and government.”
AHDB Horticulture Board chair Hayley Campbel-Gibbons also wrote to growers to say: “My term on the board of AHDB, and role as chairwoman of the AHDB horticulture board ended on 31st October. Much has changed since I joined the organisation three year’s ago, not least the landmark vote to end the AHDB horticulture and potatoes levies.
“It has not been an easy task to wind-down our activities, in part because of the time it is taking Defra to issue the consultation on the future, but also because the process is involving making the vast majority of our valued team of people redundant. All of whom have shown true professionalism and resilience during a very difficult time.
“I respect the ballot outcome of course, and recognise the wind-down as a necessary course of action. At the same time, I wish those growers who do want to see continued investment in research in their sector the very best in their efforts to find a way forward on collaborative funding.”
She said the final bill to settle the balance on AHDB Horticulture’s accounts and activities includes continuing the EAMU programme for a further year (2022/23), at Defra’s request, and also ensures that any research work we had already started is completed. It also covers the cost of staff redundancies, and horticulture’s central cost contribution.
“On governance, the horticulture board has a newly revised and slimmed down terms of reference, which is to provide oversight of the wind-down process. All meetings will be held virtually, and the board will be chaired on an interim basis by Peter Judge, who sits on the board currently, and will attend the main AHDB board as an observer. This arrangement will be reviewed in March 2022, when the current levy period ends.
“Recognising the need to provide oversight of the remaining research projects (51 in total currently which will reduce to 28 running in 2022/23, 11 in 2023/24 and 3 in 2024/25), the most efficient way for us to achieve this will be agreed with the panels and sector board over the coming weeks.
“As part of the wind-down plan and budget, AHDB will be creating a legacy website to ensure that all of the past and future work funded by growers will be available to view online.
“All that remains for me to say is thank you to all of the growers and staff who have supported me in my role at AHDB; in particular, my fellow board members past and present, those growers who got involved in our efforts to reform the levy, the panel members who have given so much of their time and effort to our research, our strategic centres and those who have attended our many trials and events. A special thank you to the whole horticulture team at AHDB.”