Mobile homes: business and regulatory impact assessment

Regulatory and EU Alignment Impacts

This measure is limited to Scotland and is unlikely to impact on EU alignment.

Intra-UK Trade

The proposed change does not impact directly on intra-UK trade and the proposed change is not impacted by the provisions of the United Kingdom Internal Markets Act 2020 or a Common Framework Agreement. The service itself (provision of a pitch/maintenance etc) relates only to pitches provided in Scotland. The regulation of the service is under the same legislation and, though amended, broadly aligns between Scotland, England and Wales. At present, the limitation on uprating in England and Wales is more restrictive than it is in Scotland because RPI is usually higher than the CPI. The proposed change brings the market into line by aligning the index used to regulate pitch fee increases between Scotland, England and Wales, providing consistency for businesses which operate in more than one country. Although the RPI is set as a cap, it is open to an operator to uprate by a lower percentage in order for fees to remain competitive with providers in other parts of the country.

International Trade

This measure is limited to Scotland and is unlikely to impact on international trade and investment.

EU Alignment

This measure is limited to Scotland and is unlikely to impact on the Scottish Government’s policy to maintain alignment with the EU.

Scottish Firms Impact Test

Information on the make-up of the sector in Scotland is not available but research^[17] in 2022 found that, in England, parks are typically private businesses, most frequently operating as private limited companies. 60% of the parks surveyed operated as a single park, with only 5% operating as part of a group of 20 or more parks.

As set out under the Consultation section, mobile home site operators represented by the BH&HPA did not want to have a meeting to discuss the consultation. We have since met with a representative and agreed to discuss the practicalities of implementation with them.

There were only six responses to the consultation from site operators or those representing the interests of site operators and their views tended to be more or less equally divided between being in favour of and being against the proposals in the consultation. Concerns were expressed though the consultation about increases in costs associated with operating a site, for example insurance premiums. While we recognise that a period of increased inflation has affected businesses a well as individuals, remaining with the existing measure of inflation is not considered appropriate due to methodological issues. There are strong arguments in favour of CPI as the best current alternative measure of inflation.

Competition Assessment

We have applied the Competition and Markets Authority (“CMA”) Competition Filter questions and find there will be no impact on competition. Using the CMA Competition Filter questions we have concluded that the proposals will neither directly or indirectly limit the number or range of suppliers, limit the ability of suppliers to compete or reduce suppliers’ incentives to compete vigorously.

Will the measure directly or indirectly limit the number or range of suppliers?

No. A cap on the increase in pitch fees of CPI is expected to provide sufficient headroom that operators will be able to cover cost increases. The fact that the cap is set in line with CPI in England and Wales supports this. The 1983 Act makes separate provision for the pitch fee to be increased to cover improvements to sites.

Will the measure limit the ability of suppliers to compete?

No. The intervention affects all operators equally. Furthermore, since it applies to the increase for each individual pitch, it does not disproportionately affect suppliers of different sizes. The argument could be made that larger operators have more resilience to a reduction in income, but to the extent that this is true it is a function of the advantages of size and is not a direct result of the operation of the legislation. Remaining with RPI is not considered appropriate due to methodological issues which make it a poor measure of inflation. There are strong arguments in favour of CPI as the best current alternative measure of inflation for the purposes of the 1983 Act.

Will the measure limit suppliers' incentives to compete vigorously?

No. This element of the contract with service providers is already regulated. The measure caps the annual increase in pitch fees but suppliers have the option to charge fees at any level up to the cap.

Will the measure limit the choices and information available to consumers?

No.

Consumer Assessment

Residents of permanent licenced residential mobile home sites will be affected by the proposals.

Does the policy affect the quality, availability or price of any goods or services in a market?

Yes. The annual increase in pitch fees is already regulated under the 1983 Act. The change will ensure that the inflation measure used is reliable and up to date.

Does the policy affect the essential services market, such as energy or water?

No.

Does the policy involve storage or increased use of consumer data?

No.

Does the policy increase opportunities for unscrupulous suppliers to target consumers?

No.

Does the policy impact the information available to consumers on either goods or services, or their rights in relation to these?

No.

Does the policy affect routes for consumers to seek advice or raise complaints on consumer issues?

No.

Test Run of Business Forms

The measure will not require new business forms. Site operators will be required to update their existing forms, but changes are expected to be minimal.

Digital Impact Test

This measure will not have an impact on advances in digital technology or its future delivery.

Legal Aid Impact Test

This measure will not have an impact on the legal aid fund.