1. Introduction

1.1. The aim of the Met Office is to provide for the UK an effective, modern and efficient national meteorological service. With respect to pricing, its policy is to be fair and consistent such that it meets all legal and regulatory requirements whilst achieving the objective of its Framework Document to 'maximise the return to the taxpayer' from profitable commercial outlets for services. This policy aims to achieve a fair balance between value for money for customers and a fair return to the Met Office.

1.2. This pricing policy provides explanation of our pricing policies along with high-level information on the applicable regulations, legislation and government guidelines which the Met Office takes into account when setting prices for its products. This ensures that the Met Office maintains a 'level playing field' between Met Office business activity and the private sector, both of which depend on data collected and processed by the Met Office.

2. The Met Office's Public Sector Information

2.1.1.1. The Met Office complies with the Re-use of Public Sector Information Regulations 2005 (the Regulations). The Regulations aim to increase the economic benefit of 'public task' information through increasing its availability for exploitation outside the public sector. 

2.2.1.2. It is the Met Office's public task to produce the outputs which are agreed with and paid for by the Public Weather Service Customer Group (PWSCG) from time to time.

2.3.1.3. The Met Office's Public Sector Information is made up of the agreed Public Weather Service outputs (as defined in the PWSCG/Met Office Customer Supplier Agreement and including baseline data).

2.4.1.4. Other outputs, data, know-how and materials do not constitute the Met Office's Public Sector Information.

2.5.1.5. The Met Office makes available a range of data and various products, licensed for re-use in accordance with the Regulations.  These can be found on the Met Office website at http://www.metoffice.gov.uk/, the ECOMET website at www.ecomet.eu and by contacting the Met Office Weather Desk or Data Wholesaling Manager by email enquiries@metoffice.gov.uk or by telephone on 0870 900 0100. Re-use means "the use by any person of information held by the Met Office for a purpose other than the initial purpose within the Met Office's public task for which the information was produced". In accordance with the Regulations, the pricing of the Met Office's Public Sector Information is clear and transparent.

2.6.1.6. If information can be made available in digital format via the internet, the costs of allowing re-use will often not involve any additional cost to the Met Office. The Met Office aims to price its Public Sector Information in a fair, consistent and non-discriminatory manner.

2.7.1.7. The Met Office supplies and charges its own internal commercial arm for re-use of its Public Sector Information on the same terms and conditions as apply to external customers to maintain a 'level playing field' between Met Office business activity and the private sector and prevent cross-subsidisation of the Met Office's non-public task activities.

3. The Information Fair Trader Scheme

3.1. The Met Office applies the principles of the Information Fair Trader Scheme to its Public Sector Information. These principles are as follows:

• 3.1.1. Maximisation: An obligation to maximise re-use of Met Office Public Sector Information.
• 3.1.2. Simplicity: Simplicity of processes, policies and licences.
• 3.1.3. Transparency: Transparency of licence terms and conditions and charging information.
• 3.1.4. Fairness: Compliance with competition laws and clear, published prices fairly applied to external customers and in-house commercial arm.
• 3.1.5. Challenge: Robust complaints process.
• 3.1.6. Innovation: Explores new methods to help re-users innovate.

3.2. The Met Office's commitment to the Information Fair Trader Scheme can be found in our Information fair trader statement . The Met Office was last audited for compliance with the Information Fair Trader Scheme by The National Archive in September 2007. The findings of this audit can be found at http://www.nationalarchives.gov.uk/documents/met-office-ifts-report.pdf (PDF, 203 kB).

4. Met Office business structure

4.1. The Met Office undertakes both Commercial Business and Government Business.

4.2. The Met Office's Commercial Business comprises four revenue generating programmes and customers include both private and public sector organisations. The four revenue generating programmes are Consulting, Transport, Media, and Training. 4.3. The Met Office's Commercial Business engages primarily in Competed Business. This means any business that is, or has been, open to competition in any way irrespective of the sources of payment or funding for that business. It is Met Office policy (consistent with HM Treasury Guidance) to price Competed Business on a value basis (i.e. a price which is lawful, profitable and which the customer is willing to pay). 4.4. The Met Office's Government Business is comprised of:

• 4.4.1. The Public Weather Service: which manages the Met Office's operational capability (e.g. observing networks and super computing facilities) to produce a range of services (including basic weather forecasts and severe weather warnings) 'free at point of use' for the emergency services, the general public and all public and private sector re-users;
• 4.4.2. Government Services: research, advice, support and operational services to government departments and public sector bodies to inform policy and help them to deliver their legislative responsibilities and public tasks (e.g. our programme of climate change research which is currently sponsored by Defra and DECC);
• 4.4.3. Defence: which manages direct services to MoD in support of the UK's defence commitments and services to other national and international defence customers.

4.5 The Met Office's Government Business engages primarily in Competable and Non-Competed Business:

• 4.5.1. Competable Business means any business that may be made open to competition, and does not otherwise fall within the category of "Competed" (e.g. business funded by the private sector or a local authority that has not been competed, business with a public sector body where the activity lies outside its public task or where it decides to pay for the activity out of discretionary funds or where the Met Office is aware that the business may be open to competition in the near future).
• 4.5.2. Non-Competed Business means any business with Government Departments (or their Agencies) that contributes to the delivery of their public tasks and does not otherwise fall within the category of Competed or Competable. HM Treasury Guidance states that where the Met Office provides non-competed public services (including services to other public sector bodies), the standard approach is to price such business based upon full cost recovery plus a real charge for the cost of capital and may include an agreed efficiency target. Price calculations are open to scrutiny by customers who may request an external audit covering the calculation of profit margins and the allocation of costs. 

5. Categories of Met Office information and services

5.1. The Met Office categorises its data and services as set out in the table below:

• 5.2.1. Wholesale Data: This can be accessed by contacting the Met Office Weather Desk or Data Wholesaling Manager by email on enquiries@metoffice.gov.uk or by telephone on 0870 900 0100 or by accessing the ECOMET website at www.ecomet.eu.  This is Public Sector Information and the Met Office may charge extraction, handling, distribution and delivery costs. The licensing of Wholesale Data is managed by the Met Office Data Wholesaling Manager. Wholesale Data is priced according to the Wholesale Data Catalogue. Wholesale Data is supplied to the Met Office's commercial services arm on the same terms and conditions as apply to external customers.
• 5.2.2. Business data feeds: bespoke delivery channels of otherwise lower value data.
• 5.2.3.Customer-specific: Higher-value commercial or government services to which unique value has been added.

5.3. The Business data feeds or Customer-specific data that forms part of Met Office Competed or Competable business are priced on an individual basis, dependent upon the nature of the service and the requirements of the customer. Services are priced at a fair market value, ranging from standard services positioned for entry level/basic requirements to high quality, premium price services exhibiting demonstrable financial or non financial benefit.  Prices are set to reflect customer benefits relative to current market conditions, the competitors' services and how the market is expected to develop. These guidelines apply equally to public sector and private sector customers, in cases where the contract is awarded through competitive tender.

5.4. The Met Office applies a Target Average Price (TAP) methodology to price Competed business. TAP allows a Marketing Manager to set a price range for a product, giving the Account Manager scope to negotiate with the customer. The range is made up of a minimum and maximum price with the expectation that over a period of a year, the average price of all the products sold comes to the TAP. The principal behind the methodology is to:

• 5.4.1. Set a margin that is desirable and can be achieved on average over the period of a year;
• 5.4.2. Allow a scale that has a maximum and minimum price;
• 5.4.3. Show consistency of pricing associated with any product;
• 5.4.4. Have profitable products.

5.5. Fair play statement: The Met Office will continue to price its services fairly to customers, using a fair market value such that the Met Office can maximise the offset to tax payers through its commercial activities. Any exceptions will be published on the Met Office's website.

6. Licence provisions and pricing

6.1. The prices of Met Office products and services may also be affected by the terms of the licence, in particular the Permitted Uses for the products and services (or Deliverables) granted by the Met Office to the customer. These Permitted Uses include:

• 6.1.1. Internal Business Use: the use of the Deliverables by the Customer's officers, employees and/or contractors solely in the course of the Customer's day to day internal business administration activities and the day to day running of the Customer's business and organisation and expressly excludes the supply and/or sharing of the Deliverables to and/or with third parties, whether in their original form and/or incorporated into and/or adapted for the Customer's products and/or services.
• 6.1.2. External Business Use: the supply and/or sharing of the Deliverables to and/or with third parties, whether in their original form and/or incorporated into and/or adapted for the Customer's products and/or services in accordance with the scope which is agreed between the Customer and the Met Office.
• 6.1.3. Educational Use: use of the Deliverables:
  • 6.1.3.1. in the course of teaching which takes place at a school, college or university;
  • 6.1.3.2. use, by a school, college or university, for the generation of teaching materials;
  • 6.1.3.3. use, in conjunction with the published results, know-how or outputs arising from Non Commercial Research, for the provision of occasional, un-marketed and nominally remunerated consultancy by a school, college or university.
• 6.1.4. Non-Commercial Research Use: original investigation to which all of the following conditions apply:
  • 6.1.4.1. neither it nor its results have been commissioned exclusively by any person and/or organisation in the private sector;
  • 6.1.4.2. the results, know-how and outputs arising from it will not be used, displayed, presented or made available in such a way as to directly or indirectly create, build, further or promote a commercial relationship between the licensee and a third party or in such a way that a third party could use all or part of the results, know-how or outputs to further his/her/its commercial interests;
  • 6.1.4.3. the results, know-how and outputs arising from it will be made public as soon as reasonably practicable, without restriction of access and at a fee which does not exceed the cost of delivery;
  • 6.1.4.4. it does not involve the use of live (real-time) data feeds;
  • 6.1.4.5. its scope and nature will be summarised in writing to the satisfaction of the Met Office and approved in writing by the Met Office before a licence is granted;
  • 6.1.4.6. the applicable licence may not be used for activities which go beyond the authorised research.

7. Funding of research and development activities

7.1. Funding for research and development (R&D) activities are treated for accounting purposes as revenue for the relevant Met Office programme that receives it. R&D funding may come from a variety of sources including UK government departments (e.g. the Defra/DECC, who fund our Integrated Climate Programme), NERC (primarily for collaborative research projects), the European Union (e.g. Framework 7 projects), overseas governments (e.g. Queensland Government), and commercial customers (e.g. energy projects).

7.2. Research funding arrangements are priced based upon full cost recovery plus a real charge for the cost of capital and may include an agreed efficiency target. For commercial research arrangements, a mark up may be included to reflect the nature of the service and the requirements of the customer. Some EU funding arrangements limit or prevent the Met Office from making a charge for the cost of capital and, in these situations the Met Office may look to provide partial funding itself from existing funding streams, subject to a strong alignment with the Met Office's existing research activities and outputs.

8. Competition laws and State Aid

8.1. It is illegal for the Met Office to carry out anti-competitive behaviours and practices which constitute an abuse of its position when it operates in markets where it has strong market power (referred to as "dominance") and the effectof such abuse is to restrict competition.

8.2. Competition laws do not presume that the mere possession of dominance is against the public interest, but rather that certain behaviours or practices derived from dominance may be against the public interest. In particular, the Met Office ensures that it is not involved in the following pricing behaviours or practices which are likely to be illegal:

• 8.2.1. Excessive Pricing: Where the Met Office has a dominant position, making sales excessively above cost (taking into account market and product factors). One sign of excessively high prices is abnormally high rates of profit.
• 8.2.2. Predatory Pricing: Where the Met Office has a dominant position, making sales below average variable cost to drive competitors out of the market. The test is to look at the Met Office's price in relation to its average costs. If its price is below average variable cost, predation would be assumed. If its price is above average variable cost, but below average total cost, then we need to establish whether the reason was to eliminate a competitor.
• 8.2.3. Price discrimination: Where the Met Office has a dominant position, discriminating between customers without justification. Differential prices (or other terms and conditions of service) for the same product to different customers (except for objective reasons such as differences in quality or quantity) that distort competition. For example if specific teams within the Met Office provide the same or similar services to the same or similar customers at different prices.
• 8.2.4. Discounts to exclusive customers: Where the Met Office has a dominant position and wants to offer an extra discount to customers who buy exclusively from it.

8.3. Irrespective of whether the Met Office is dominant in a particular market, there are certain behaviours or practices that are blacklisted. These include:

• 8.3.1 Price fixing: Agreements with other organisations that fix prices (e.g. resale prices), set minimum prices, or a range outside which prices may not move.
• 8.3.2. Limiting supply or production: Agreements with other organisations that limit supply or production in order to keep prices artificially high.

9. Other Legislation and Regulation

9.1. The Met Office operates within all relevant and applicable legislative and regulatory requirements relating to pricing (be they mandatory or self-regulating codes of practice).  These include, but are not restricted to HM Treasury Guidelines, International Financial Reporting Standards and Revenue Recognition rules.

10. Price reviews and updates

10.1. Non-competed contracts and related pricing are reviewed and updated on timescales agreed between Met Office and the relevant Government customer.

10.2. Competable pricing structures are reviewed and updated at the time of contract negotiation or as agreed between Government Services and the customer.

10.3. Competed prices are reviewed at least annually, at which time they may be updated and reissued. 

11. Complaints

11.1. Any complaints regarding Met Office pricing should in the first instance be addressed to the Customer Feedback Manager at the Customer Centre . The Met Office takes its commitment to Fair Trading extremely seriously and will aim to respond in the first instance to any complaint over pricing within seven working days.

11.2. If you are not satisfied with the response provided, please inform the Head of Business Management, via the  Customer Centre  .

11.3. If you are still unhappy following an internal review you can make a complaint under the PSI Regulations.