HSE could lose more than half the fees it recovers to the treasury

The Fee for Intervention (FFI) scheme is now in full operation, and has been since 1st October 2012. However it now appears that the HSE won’t be keeping the full amount recovered under the scheme, with the top layer being skimmed off by the treasury.

The Health & Safety Executive will keep £10 million of the first six months’ revenue, rising to 17 of the projected £37 million recovery in 2013/14 (the scheme’s first full year of operation), and £23 million of the projected £39 million in 2014/15.

Part of the HSE’s original justification for FFI, which will enable it to recover the cost of inspectors’ time wherever they find a “material breach” of Health & Safety law justifying a letter or enforcement notice, was that it would support the executive at a time of budget cuts. The government’s 35% cut in the HSE’s funding will leave the regulator around £80 million a year worse off from 2014–15.

During the consultation period last autumn, the HSE advised that FFI, the introduction of which was delayed from April, could bring as much as £43.6 million a year from non-compliant businesses and operators of onshore boreholes.

It has since revised these estimates to reflect both the change in the hourly FFI rate and revisions to the expected cost recoverable activity.

This is good news for businesses as because the HSE will only gain a set amount from the FFI scheme, there will be no incentive to over-enforce to raise additional funds. However, in line with the reduction in the HSEs budget the overall staff numbers are still likely to decrease.

The only way to avoid the cost is to ensure that you comply with the relevant Health & Safety law, and to deal quickly with any breaches that may occur.