HSE Board approves cost recovery scheme

Outsource Safety Ltd BlogHSE Board approves cost recovery scheme
December 9, 2011 Posted by Roger Hart

The HSE Board today (7 December) agreed that from April next year the HSE will charge duty-holders who materially breach health and safety law an hourly rate of £124 for its intervention. This has been reduced slightly from the original consultation figure of £133 per hour and the cost will also now be counted from when a letter or e-mail recording the duty-holder’s breach is sent rather than applying from the start of the visit.

The recent consultation on the fee-for-intervention scheme (FFI) – part of the Government’s ‘Good health and safety – good for everyone’ framework unveiled in March gained 300 responses and the HSE also held face-to-face dialogue with some 80 trade associations and companies.

Seven key concerns were identified as being raised by the majority of consultees:

  • A change in priorities by the HSE in order to maximise its receipts;
  • Damage to the constructive relationship between the regulator and business;
  • The definition of ‘material breach’ and reliance on individual inspectors’ opinions, or judgements;
  • The ‘trigger’ for implementing FFI;
  • Whether or not local-authority regulators should be included in the scheme;
  • The financial impact on businesses – particularly SMEs; and
  • The integrity of the disputes process.

Gordon MacDonald, programme director for the scheme, told the Board that these concerns were common to most respondents, whether they were for or against. Some of them, he said, could be addressed fairly easily – such as by issuing guidance on what constitutes a material breach, and translating the regulator’s Enforcement Management Model (EMM) into ‘lay’ language so that people can better understand how inspectors operate within defined policies and procedures when making judgements.

As the majority of respondents were against including Local Authorities within the scope of the scheme, the Board agreed that they would be excluded.

Comment from Roger Hart, MD, C&G Safety
The concerns we have centre on the following key issues;

  1. Business have been ‘swopped’ between LA and HSE enforcement over the years, this is now a two tier system with some businesses being threatened by the potential for FFI bills and others, who operate exacly the same business but remain under LA control, not having to contend with this, is this fair?
  2. As HSE comes to rely on the receipts from FFI fees, will this bring a difference in enforcement styles? Inspectors will surely have some pressure on them to produce a number of receipts within a region with budgets having been so stretched over recent years.
  3. How will the relationship between regulator and the regulated be affected by this? Up until now an Inspector was there to see risks controlled for the benefit of all, now they could be adding to the cost benefit analysis in a negative way. If it costs £5,000 to control the risk and the FFI bill comes to £2,500 where does that leave the business and its employees in terms of cost benefit analysis?
  4. How will ability to pay be accounted for (if at all)? Two businesses in the same sector with the same number of employees can make vastly different profits. Similarly, some businesses may simply be unable to pay in the current climate but this will be complex knowing that Treasury rules will bind HSE t recovering it full costs.
  5. Who will monitor the process to ensure it is both fair and equitable? HSE cannot be both judge and jury but who will be best placed to decide on what is fair?

We must put this in perspective, it is likely that the businesses affected will be less than 1% of all UK enterprises but, with talk of £40m being a likely figure for FFI receipts in the first year, the impact on those unlucky enough to see the scheme working first hand could be significant. Our advice is to review your Enforcing Authority, if you’re a lower risk business and have been passed to HSE from LA control perhaps its time to request to return.

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