Fees for Intervention
FFI Explained
HSE has replaced the existing Health and Safety (Fees) Regulations 2010 with new regulations. Implemented on 1st October 2012, these new regulations place a duty on HSE to recover the costs of its interventions under the Health and Safety at Work Act 1974 and other health and safety law.
The Health and Safety Executive (HSE) already recovers its costs in a range of industries but has proposed to extend its current systems of cost recovery to include a fee for intervention. This means an inspector will be required by law to charge for the inspection and any subsequent actions when a material breach of the law has been found. Under the new proposals the HSE will recover costs at current estimates of up to £124 per hour. Costs of any specialist support needed by the HSE would also be passed on.
Due to public sector cuts, HSE funding is to be cut by 35% over four years starting in 2011 which would be expected to result in a lower level of enforcement and a consequent decrease in health and safety standards throughout Great Britain, with ensuring costs to individuals and their dependants (notably the pain, grief, suffering and loss of earnings from work related injuries and ill health) to employers (in sick pay etc.) and to the government (mainly NHS, benefits paid and taxes lost). Cost recovery will allow HSE to provide a higher level of enforcement than otherwise possible with the cuts and avoidance of the above costs.
Response from Business
Birmingham Chamber of Commerce Group, among other bodies, has protested the decision. According to the Chamber, businesses will be charged at a rate of £124 an hour by HSE for serving enforcement notices and advice if they fail to comply with the “huge volume of intricate and complex health and safety legislation”.
Vice President Steve Brittan has written to the Department of Work and Pensions, the Chancellor and Business Secretary Vince Cable claiming that the move could introduce a “profit motive” into the work of the HSE.
For the first time, he said, the HSE will be financially incentivised to identify problems and breaches.
“The proposal, which could see the average cost for an inspection resulting in a letter costing up to £750, will put needless and counter-productive costs on businesses that are rightly focused on doing business and creating jobs at this critical juncture,” Mr Brittan went on.
He warned that the changes could also put workers at risk by discouraging businesses from approaching the HSE for advice for fear of incurring massive costs.
Mr Brittan pointed out that the £124 rate could pay the hourly wages of 47 apprentices. He called on the Government to ensure that all but essential health and safety legislation is removed with the balance enforced “where appropriate”.
The Federation of Small Businesses (FSB) has similarly expressed concern that the Regulations could “damage relationships” and may be seen as a way to raise revenue rather than improving compliance. The FSB says that for a small or micro business, a bill of £750 or more for a material fault could be “extremely damaging”, especially during difficult economic times.
The FSB is arguing that this will disproportionally affect micro firms as fees of this level will have a greater affect on the ability of the business to function and grow. It is concerned that small firms may view the proposal as a revenue generating exercise that could damage the HSE’s relationship with business. The Federation is also questioning whether the money raised would go to the HSE or to the Treasury.
The Chemical Business Association (CBA) has branded the plans of the HSE as the equivalent of “seeking a blank cheque from industry” to compensate for cuts in its departmental budget.