October launch for HSE cost recovery scheme

The Health and Safety Executive has confirmed that its controversial cost recovery scheme, Fee for Intervention (FFI), will start on October 1, 2012.

The scheme, which is still subject to Parliamentary approval, gives the HSE the authority to recover costs related to the time and effort it spends investigating and taking enforcement action from companies breaking health and safety laws. But businesses that are inspected but not found guilty of an offence will not be issued with a fee.

The FFI applies to any “material breach” of health and safety law that  requires the HSE to issue a notice in writing via a letter or email. An inspectors’ time will be charged at £124 an hour, with the total fee based on the amount of time it takes HSE to identify and conclude its regulatory action, including associated office work 

The plan stems from a government review conducted in March 2011, which argued that the cost of enforcing H&S legislation should shift from the public purse to law-breaking companies. 

An impact assessment of the FFI, published by HSE, found that material breaches that resulted in a letter or email, but not a prohibition or improvement notice, would last about three quarters of a day and therefore cost about £750 (based on the original £133 hourly cost utilised during the study).  Breaches that triggered an improvement or prohibition notice could cost £1,500.

An investigation into an accident or complaint that lasted four days could cost the firm investigated about £4,000, if it was found at fault. 

Based on these estimates, the HSE hopes to recover up to £43.6m of costs each year across  UK workplaces, including manufacturing as well as construction. The oil, gas and nuclear sectors are already subject to a different fee-based scheme.

According to an HSE leaflet, the possibility of bearing FFI costs will encourage businesses to comply with H&S legislation in the first place, and will also discourage businesses who undercut their competitors by not complying with the law and putting people at risk.

But construction groups have raised concerns about the FFI, suggesting it may lead to abuse, with HSE inspectors tempted to use the system to make up for the deep government funding cuts.

Others claim the scheme casts doubt on HSE’s independent regulatory role as it will now have a financial incentive for uncovering faults.