Health & Safety Executive (HSE) Announce "Recovery of Costs"

With effect from April 2012 the Health & Safety Executive (HSE) propose to try to recover their costs from businesses that put their employees at risk and breach health and safety law. They propose charging duty-holders an hourly rate of £124 (they had been hoping to charge £133 per hour) per hour for them to intervene under their “Fee for Intervention (FFI)” scheme.

A Change In Priorities

The HSE has recently suffered a 35% cut in funding and this lies behind their actions. They commenced a pilot study to charge organisations for investigative work relating to enforcement action. They are also proposing to charge £750 for issuing a letter as a result of action following an inspection and £1500 for issuing an enforcement notice. These fees will be particularly aimed at companies who cut corners or ignore requirements to put their health and safety in order. These costs will be in addition to any prosecution costs or fines imposed by the HSE for breach of health and safety law.
This departure to traditional practice marks a change in priorities by the HSE in order to maximise its receipts and could well damage to the good relationship between the regulator and the business community and will certainly cause financial impact on businesses, notably SMEs.
A spokesman for the HSE said “the relationship between the regulator and the regulated will not suffer; he claimed “you will not see a different HSE as a result of this scheme. We will only apply FFI where it is warranted, and not frivolously.” Essentially, the cut in HSE resources has required it to spend more time securing compliance from high-risk businesses and poor performers, so the regulator will naturally be spending more time with companies where there isn’t a mutually supportive relationship in the first place.
The new approach will obviously have a financial impact on those companies whose non-compliance requires the intervention of the HSE, and many consultees were concerned that the hourly rate could be an unnecessary expense for businesses in the current economic climate, particularly SMEs.
Some suggested that ability to pay should be factored in, or that the fee should be a flat one, or based on company size but, as MacDonald explained, the HSE is bound by Treasury rules on this, in that it must recover its full costs providing they are reasonably incurred.
As for the impact on SMEs, he pointed out that, given the HSE’s plans for proactive inspections and estimates for reactive investigations, the businesses potentially affected by FFI compared to the total population of businesses is likely to be around 1 per cent or less of all UK enterprises.

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