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Peter James, Health and Safety Partner at Plexus Law, analyses a tough first 18 months for the HSE’s Fee for Intervention and asks whether it will see its second birthday.

These are troubled times for the Fee for Intervention (FFI), the regulatory scheme giving powers to the HSE to raise revenue from duty holders judged to be in breach of health and safety laws. Introduced in October 2012, FFI did not meet with universal approval and support from businesses or from within the HSE itself.

The aim of FFI was to transfer some of the costs of health and safety regulation from hard-hit taxpayers to those in breach of their health and safety responsibilities. The HSE had previously resisted similar revenue- raising proposals but a significant reduction in its government funding saw the regulator embrace FFI. Under the Health and Safety (Fees) Regulations 2012, organisations in material breach of their health and safety duties were to be charged £124 per hour plus disbursements to cover HSE’s costs in dealing with the breach, including call outs, inspections, investigations and the issue of enforcement notices. Hardly surprising, therefore, that FFI was seen by many as a thinly-disguised means of bridging the funding gap in the HSE’s budget.

FFI has become a financial headache for the HSE – indeed, its very future being questioned following an independent review. Figures disclosed by the HSE suggest the FFI programme will fall significantly short

of its budgeted income. In October 2013, half way through HSE’s financial year, FFI had generated £3.9million against a target income of £8.5million. FFI income increased to £7million by the end of December but overall income for the year looks likely to be around £10.5million against a budgeted income of £17million. The budgeted income for next year (2014/15) has been set at £23million.


As if the likely financial shortfalls were not bad enough, an independent review of HSE’s functions commissioned by the Department of Work and Pensions in April last year has raised fundamental questions about FFI which could see the scheme end before its second anniversary. The main purpose of the review by Martin Temple, Chairman of the Engineering Employers’ Federation, was to consider HSE’s future role as regulator. He concluded the functions of HSE continued to be necessary and that an arms-length public sector body was “the most efficient and effective way to deliver those functions”. He also felt compelled to address issues surrounding FFI because of the “wealth of comments received from stakeholders”. His main

concerns surrounded the view that FFI had damaged HSE’s reputation for impartiality and independence and its integrity as a regulator. FFI was seen as a penalty or fine; it was against the principles of justice for HSE to act as “police, prosecutor, judge and jury”.

Temple was also concerned at the link between FFI and HSE’s need to fill the funding gap in its budget. The impression amongst duty holders, shared by Mr Temple, was that the HSE had an income target to achieve. He 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”. He also recommended that at least one independent person be involved at the first formal stage in FFI appeals.

Duty holders are not alone in their dislike of FFI. It seems many HSE inspectors see it as an unwelcome layer of bureaucracy and form filling stretching tight resources to breaking point. The HSE accepts FFI may have adversely affected its relationship with those it is seeking to regulate.

The HSE hierarchy will argue that FFI is still in its infancy; its inspectors are still getting to grips with the charging regime. Simply teething problems or more fundamental, possibly terminal failings? We will see in the coming year. 15

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