HSE urged to reconsider cost recovery scheme

The Health and Safety Executive's cost recovery scheme, called Fee for Intervention, has been strongly criticised in a major independent review of the safety watchdog, backed by the Department for Work and Pensions.

Engineering Employers Federation chair Martin Temple who carried out the HSE’s first ever triennial review, called Fees for Intervention (FFI) “a dangerous model” which potentially undermined the integrity of the HSE and called for further consultation on its use.

Temple said: “While my remit for this review was primarily to consider the continuing need for HSE’s function, the wealth of comments I received from stakeholders regarding the Fee for Intervention regime has compelled me to address the issue. I am very concerned at the strength of feeling from stakeholders that FFI has damaged the HSE’s reputation for acting impartially and independently, and therefore its integrity as a regulator.”

Although the number of injuries to workers has fallen over the last five years, waste and recycling remains one of Britain’s higher risk industries with 10 people killed in 2012/13, double the lives lost in the previous year. Recycling operators face can face fines under the FFI scheme for health and safety breaches.

The scheme has been in place since October 2013. Under the new process, those who break health and safety laws are liable for recovery of HSE’s related costs, including inspection, investigation and taking enforcement action.

Before the scheme was introduced last October, a HSE inspector would visit a premise and if they identify a breach they would suggest improvements (there were no charges associated with such visits). However, from October 2013 the HSE started charge £124 for each hour of work where they identify a ‘material breach’.

A material breach is when, in the opinion of the HSE inspector, there is or has been a contravention of health and safety law that requires them to issue notice in writing of that opinion to the duty holder.

Temple said that the scheme “wouldn’t be a problem if British H&S law was black and white rather than goal setting. But the element of judgment in how H&S law is interpreted – by both duty holders and the HSE – means that there is a risk that inspector decisions will be, or be seen to be, skewed by the need to raise income”.

Temple set out a series of recommendations on Fees for Intervention, which raised nearly three quarter of a million pounds in its first six months of operation. These included a further review on the views of stakeholders on how FFI is working.

Temple also recommended the following:

  • if FFI is to be retained, whether the threshold for FFI has been set at the right level
  • whether there is evidence that the anticipated incentives to comply have made a difference and improved health and safety performance
  • whether there have been any detrimental impacts on the behaviour of HSE
  • inspectors and/or those inspected and/or on health and safety performance
  • consideration of alternative sources of income, which should be tested against the same criteria.

“I recommend 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,” said Temple.

Carrying out a triennial review of the HSE brings it in line with normal government policy, which is that that all non-departmental public bodies (NDPBs) should undergo a substantive review at least once every three years. The triennial review process concluded that there is a continuing need for the functions that HSE delivers, and a very strong case for those functions to continue to be delivered by an arms-length body.

It concluded that “that, on the whole, HSE is operating with the level of control and governance that should be expected of an arm’s length body of its size and profile”.

Steffan Groch, head of regulatory at national business law firm DWF, said Temple’s concerns mirrored his firm’s concerns. He said: “Although DWF continues to advise its clients in relation to ongoing FFI matters, we are seeing a growing divide between HSE inspectors and employers. This is often due to borderline cases and arguments over how much time the inspectors have spent investigating them, which can be potentially damaging for their long-term relationships with employers.”

The HSE is planning to review FFI now that the first year of operation is under way, according to Temple.

The news comes as the HSE recently appointed a new head of waste and recycling. Rick Brunt, current head of field operations for the North West replaces Graeme Walker who retires from HSE after 37 years service.

The head of waste and recycling will work closely with industry and will lead a unit of inspectors, policy officials and support staff.

Liz Gyekye



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