Paying for enforcement — fee for intervention

The HSE’s “fee for intervention” (FFI) cost recovery scheme came into effect on 1 October 2012 as a result of the Health and Safety (Fees) Regulations 2012. The regulations require the HSE to recover its costs for carrying out its regulatory functions from employers and other duty holders found to be “in material breach” of health and safety law. The fees are currently based on an hourly rate of £124.

The HSE explains that: “A material breach is where you have broken the law and the inspector judges this is serious enough for them to notify you in writing. This will either be a notification of contravention, an improvement or prohibition notice, or a prosecution.”

Examples of material breaches include not providing guards or other safety devices to prevent access to dangerous parts of machinery, and material containing asbestos being left in a poor or damaged condition, resulting in the potential for asbestos fibres to be released.

FFI only applies where the HSE is the enforcing authority. Other health and safety regulators, including local authorities, cannot recover their costs under the scheme. And it does not apply where businesses already pay fees to the HSE through other arrangements. For example, it does not apply to licensable work with asbestos by those who hold a licence for work with asbestos under the Control of Asbestos Regulations 2012, as the licence fee contains an element to cover the costs of inspection.

Government ministers made clear that the aim of the scheme is to shift the cost of health and safety regulation from the public purse to businesses and organisations that break health and safety laws.

The HSE says that it will also encourage businesses and organisations to comply with health and safety law in the first place, or to put matters right quickly when they do not, and that it will discourage those who undercut their competitors by not complying with the law and putting people at risk.

A 2014 HSE Triennial Review report was critical of the FFI cost recovery scheme and recommended that “unless the link between ‘fines’ and funding can be removed, or the benefits can be shown to outweigh the detrimental effects, and it is not possible to minimise those effects, FFI should be phased out.” (www.gov.uk/government/publications/triennial-review-report-health-and-safety-executive-2014).

But a second independent review of FFI published in September 2014 concluded that the cost recovery scheme has proven effective and should stay. It found that HSE inspectors have implemented the scheme “consistently and fairly” since it began and found no evidence to suggest that its introduction had influenced enforcement policy decisions.

The review was conducted by an independent panel chaired by Liverpool University professor of public policy Alan Harding. Other participants included representatives of the general union GMB, the Federation of Small Businesses and the Department for Work and Pensions.

In its first year FFI brought in over £5.5 million in charges across all industries. Figures revealed in a Freedom of Information request made by the business support firm ELAS showed that the sectors that received the most fees were manufacturing (38%) and construction (36%).

However, the HSE inspectors’ union Prospect’s health and safety officer Sarah Page said of the second review: “Prospect is not satisfied that reasonably practicable steps were taken to establish the views of stakeholders. Our observation is that there is far more discontent amongst inspectors and duty-holders, most of who share considerable concern about the adverse impact of FFI on their relationships, than was reported by the panel.”

Prospect has also called for “an informed debate to ensure that HSE is effectively funded in a way that maintains the confidence and support of all stakeholders and ensures that the UK remains a world leader in setting standards for health and safety”.

More information about the scheme, including guidance on the application of Fee for Intervention (FFI) is available on the HSE website at: www.hse.gov.uk/fee-for-intervention