The Marine Management Organisation (MMO), through the Department for Environment, Food and Rural Affairs (Defra), is currently consulting on a number of changes to marine licensing, including in respect of associated fees, rooted in a drive for greater cost recovery. The consultation document states that in 2023/24, licensing operations cost the MMO £6.1 million, while only £3.2 million was recovered, amounting to just 52% cost recovery.
Whilst the proposal that applicants should cover the costs of their applications may be supported in principle as part of an efficient and proportionate consenting regime, many applicants have concerns about how the MMO handles licence applications and consider that the MMO needs to be more efficient in the way applications are dealt with.
If the proposed changes are introduced, marine licence applications, variations and post consent costs are likely to increase significantly for those requiring a marine licence. It is therefore important that those affected respond to the consultation prior to 11.55pm on 15 August 2025.
Currently, licence applications are assessed and categorised into fee bands as follows:
| Fee Band | Project Cost | MMO rate | Maximum fee | Payment Terms |
| Band 2a | £0 to £49,999 | £122 per hour | £1,400 | Fees payable in full in arrears of determination of application |
| Band 2b | £50,000 to £999,999 | £122 per hour | £2,200 |
Fees payable in full in arrears of determination of application |
However, following an internal review by the MMO, it was found that cost recovery was very low. On average, cost recovery in Band 2 was only 32%, with many applications requiring more than double the chargeable hours allowed under current caps. However, the average hours spent (41 for small project Band 2a applications) suggests a lack of efficiency in the system.
1. Hourly rate increase
The MMO proposes to increase the hourly rate from £122 to £155 (a 27% increase) with further annual increases linked to inflation for Bands 2 and 3.
2. Redefinition of Band 3
In addition to the current criteria, any application involving a development over 5 hectares is proposed to be automatically classified as Band 3 (irrespective of project cost).
3. New tiers within Band 2
The Band 2 category will be split into four sub-bands based on project cost. The proposed changes are:
| New Fee Band | New Maximum Fee | New Minimum Project Cost | New Maximum Project Cost |
| Band 2A | £2,950 | £0 | £19,999 |
| Band 2B | £4,650 | £20,000 | £74,999 |
| Band 2C | £9,220 | £75,000 | £249,999 |
| Band 2D | £12,390 | £250,000 | £999,999 |
The consultation states the fee ceilings have been adjusted so that not all cases will hit the fee ceiling for their respective bands. However based on the statistics from the consultation it seems likely that many will. For example, 93% of the current 2B applications (project cost in excess of £50,000) required more than 20 chargeable hours to complete, with an average time per case of 49 chargeable hours (which equates to £7,595 at £155 per hour).
These adjustments are designed to better match the MMO resource demands. However, an applicant who previously fell into Band 2B and paid a maximum fee of £2,200, can now expect to pay a fee of up to £12,390 if they fall into the new Band 2D, which is an increase of 563%.
Currently, licence variations are charged at £94 per hour, a rate which has not been changed since 2014. Licence variations, which are often necessary during a project's lifespan, currently fall into the followings bands:
| Variation Type | MMO rate | Maximum fee |
| V0 - A change to a licence where the charge has been waived by the MMO | Not applicable | Not applicable |
| V1 - Administrative changes such as change of name of vessel, change of registration number of a vehicle or the name or address of an agent, contractor or sub-contractor. | £94 per hour | £50 |
| V2 - Routine changes not requiring external consultation | £94 per hour | £200 |
| V3 - Complex changes requiring external consultation | £94 per hour | No maximum |
Licence variations now account for around 40% of marine licence determinations. The proposed new hourly rate is £155 per hour and increasing the fee ceilings to the following:
| Variation Type | Current MMO rate | Current maximum fee | Proposed MMO rate | Proposed maximum fee |
| V0 | Not applicable | Not applicable | Not applicable | Not applicable |
| V1 | £94 per hour | £50 | £155 per hour | £200 |
| V2 | £94 per hour | £200 | £155 per hour | £500 |
| V3 | £94 per hour | No maximum | £155 per hour | No maximum |
| Post- consent | £94 per hour | £750 | £155 per hour | £1,500 |
Although the MMO states these increases are necessary to ensure sufficient MMO resource and reduce the risk of processing delays, there is no clear commitment to performance improvements in return. Stakeholders are being asked to pay significantly more, yet there is no guarantee of faster processing times (particularly when the ‘13 week’ determination statistics from the MMO are not an accurate guide of actual total time taken for licence applications to be determined due to many licence applications being placed ‘on hold’ during the application process), clearer guidance, or service-level commitments. A fee hike of over 60% without parallel reforms to improve turnaround or communication may appear unreasonable to some.
Where a marine licence is issued for the deposit of dredged material into the sea, licence holders are currently required to pay a levy of 1p per tonne, capped at £15,000 per year.
The annual monitoring costs ranged from £240,000 to £300,000 between 2014-2020, whereas the income generated from the levy only averaged £70,000, resulting in a shortfall. It is proposed to increase the disposal charge from 1p per tonne to 3p per tonne and to remove the maximum fee of £15,000.
| Fee | MMO rate | Maximum fee |
| Current disposal levy | Maximum tonnage of disposed material x £0.01 per tonne | £15,000 per annum |
| Proposed disposal levy | Maximum tonnage of disposed material x £0.03 per tonne | None |
Ports will see their disposal levy at least triple, with no upper limit in sight. In addition to this, there is little detail as to how the increased levy will directly improve environmental outcomes. Specifically, there is no breakdown of how the MMO intends to allocate the increased income from the levy to improve monitoring coverage, data quality or site compliance.
The following transitional policies are proposed:
| Application | Submitted before implementation date | Submitted after implementation date |
| Band 1 (Self-service) | No changes | No changes |
| Band 2 applications | Current caps and rates | Subject to new rates and band structure |
| Band 3 applications | Will be charged at £155 per hour once the changes are introduced (regardless of submission date) | Will be charged at £155 per hour |
| Licence variations (V1 & V2) | Current rates | Will be charged at £155 per hour |
| Licence variations - V3 | Will be charged at £155 per hour once the changes are introduced (regardless of submission date) | Will be charged at £155 per hour |
| Post-consent monitoring | Current rates | Will be charged at £155 per hour |
| Dredge disposal levy | Current rates | Changes take effect from 1 January 2027 |
These consultation document states that the transitional arrangements are intended to minimise disruption to ongoing projects while ensuring fair implementation of the new fee structure.
As part of the consultation, Defra is also seeking views on whether statutory advisers, such as Natural England, the Environment Agency, and the Joint Nature Conservation Committee, should also be able to recover costs for the advice they provide during the marine licensing process.
Stakeholders may be concerned about added unpredictability and further increases in licensing costs, particularly if charging frameworks are not capped.
The proposed changes represent a significant overhaul of the marine licensing charging framework. From raising hourly rates for licence applications and variations, to increasing the dredge disposal levy and removing longstanding fee caps, these reforms aim to ensure the MMO can more fully recover the costs of service delivery. However, concerns remain about whether inefficiencies within the MMO’s processes will be changed and improved, particularly given the lack of incentive (where unlimited costs can be recovered at an increased hourly rate) for improvements to be implemented.
We have also written a further article (focused on the impact on harbour authorities) on other changes to marine licensing exemptions and self-service licences proposed under the consultation. Click here to read it.
The consultation is open until 15 August 2025 and it is important that those affected respond.
For more information, please contact our marine team.
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