The Health and Safety Executive (HSE) has today announced that its cost recovery scheme, Fee for Intervention, is going ahead but will now not start in April 2012.

The scheme sets out to recover costs from those who break health and safety laws for the time and effort HSE spends on helping to put matters right – investigating and taking enforcement action.

Law-abiding businesses will be free from costs and will not pay a penny.

Gordon MacDonald, HSE’s programme director, said:

“The Government has agreed that it is right that those who break the law should pay their fair share of the costs to put things right – and not the public purse. “The Government intends to proceed with the FFI scheme as recommended to ministers by HSE’s Board in December in response to the formal consultation that took place last Summer.

“Discussions are still taking place on the technical details of the scheme, which we expect to conclude soon.

“Therefore, FFI will not be introduced in April but at the next available opportunity, which is likely to be October 2012.”

HSE is taking advantage of the extra time to work further with businesses to improve their understanding of the scheme and how it will affect them. Detailed guidance for employers and organisations will be available on HSE’s website ahead of implementation.

A practice run of the new processes and procedures underpinning the scheme is already underway in HSE and will continue until the scheme is implemented.

Further to our blog in September 2011 regarding the proposed introduction of cost recovery by the HSE please read our blog on the subject; the cost is huge, if in breach the cost is £124 per hour, that gives you all the more reason to make sure that you have all your ducks in a row and do not have any Material Breaches when April 2012 comes around.

Should the HSE visit you – get yourself and your Managers trained to identify the potential area’s you need to work on so that you and your company is complying….

Agriculture, quarries and health and social care are to be excluded from proactive HSE inspections, despite acknowledgement that they remain comparatively high-risk sectors, the Government confirmed today (21 March).

Among a number of sweeping proposals to reform the health and safety regime in Britain, the DWP has approved plans for proactive inspections to fall by a third – around 11,000 inspections a year. It also outlined proposals for the HSE to recover the costs of its inspection and investigation activity, and announced a review of health and safety regulation, with a view to reducing red tape.

Launching the new framework, Safety minister Chris Grayling said: “Of course, it is right to protect employees in the workplace, but Britain’s health and safety culture is also stifling business and holding back economic growth. The purpose of health and safety regulation is to protect people at work, and rightly so. But we need common sense at the heart of the system, and these measures will help root out the needless burden of bureaucracy.”

In addition to the high-risk sectors above, proactive inspections will also be withdrawn from several lower-risk industries, including transport, local authority-administered education provision, electricity generation, postal and courier services, as well as certain areas of manufacturing – for example, textiles, clothing, footwear, light engineering, and electrical engineering.

Proactive inspections will be retained in construction, waste and recycling, and areas of high-risk manufacturing, such as molten and base-metal manufacturing.

The decision to slash inspections has been met with outrage from unions. TUC general secretary, Brendan Barber, fumed: “Removing proactive inspections from a large number of workplaces mean that employers can get away with ignoring the law until they kill, or seriously injure someone. This is in no one’s interests and will mean an increase in deaths and injuries, leading to a rush to the bottom as cowboy companies undercut responsible employers by cutting back on safety.”

The Hazards Campaign added: “It is magical thinking for Grayling to claim these proposals will do anything but remove the credible threat of enforcement action and allow non-compliant, criminal employers to get away with harming far more workers with work-related stress, strains and pain, and injuring and killing them.”

The HSE will fill the void left by inspections by increasing joint initiatives with industry bodies to manage and control specific health and safety risks, and by targeting inspections more effectively on areas of greater risk.

The level of regulatory oversight of the major-hazard industries will not be reduced. Nevertheless, the Government is committed to “a continuing programme of modernisation of regulatory approaches and cooperation between regulators to provide a consistent and proportionate approach for business”.

A key aspect of this will involve extending the principles of cost recovery, already well-established in sectors such as offshore and nuclear, to other sectors. It is proposed that the HSE will recover all of the costs of an inspection or investigation at which a serious, material breach in standards is diagnosed, and a requirement to rectify (i.e. an enforcement notice) is formally made, together with the cost of any follow-up work.

Legally-compliant businesses will not be liable for any charge as a result of an HSE inspection and an appeal system will operate in relation to any disputes of this nature.

However, health and safety lawyers have questioned whether the move could cause more companies to appeal an enforcement notice.

James Jevon, a partner at Osborn Abas Hunt, said the proposal “would increase the importance and significance of appealing a notice, as it could be unhelpful and damaging to a defendant if it were to be disclosed during that prosecution that they paid such costs uncontested”.

Mike Appleby, a solicitor at Housemans, agreed, adding: “There is an increasing attempt by the HSE to use notices as evidence of wrongdoing in prosecutions. There is also a number of industries where the HSE does not have the relevant expertise. Are companies going to pay for the HSE to gain that expertise in an investigation with potential enforcement proceedings against them?”

The new health and safety framework, which builds on Lord Young’s review of the compensation culture last year, admits at the outset that changing the “frustrating” health and safety culture in Britain forms a key part of the Coalition’s wider deregulatory agenda. As well as the changes at HSE level, the Government has also vowed to establish an independent review of health and safety regulation, with a view to scrapping rules that put an unnecessary burden on business.

The review, which will be chaired by Professor Ragnar Löfstedt, a specialist in risk management at King’s College London, will also recommend changes aimed at clarifying the legal position of employers in cases where employees act in a grossly irresponsible manner.

Mike Macdonald, negotiator at Prospect, which represents HSE inspectors, described it as “perverse” to announce a review after introducing such significant change.

He added: “It looks as if the Government is determined to announce cuts before Professor Ragnar Löfstedt even starts his review. What happens if he concludes that more inspection, not less, is required?”

But head of health & safety at manufacturers’ body EEF, Steve Pointer, welcomed the review. He said: “While much health and safety legislation is fit for purpose some areas remain a problem, and this review has the potential to resolve anomalies, reduce burdens, and so help boost growth.”

To further ease the burden of health and safety regulation on small businesses and low-risk organisations, a new online guidance package has also been launched. Called‘Health and safety made simple’, the single piece of guidance takes SMEs through their basic health and safety duties, describing what they need to do and how they should do it. The guidance covers:

• appointing a competent health and safety advisor;
• writing a health and safety policy;
• completing risk assessments;
• consulting with employees;
• providing adequate levels of training and welfare facilities; and
• obtaining employers’ liability compulsory insurance.

The DWP framework, Good health and safety, Good for everyone is available on the DWP website.

From April next year the HSE will charge duty-holders who materially breach health and safety law an hourly rate of £124 for its intervention, which will be counted from when a letter or e-mail recording the duty holder’s breach is sent.

These were among the proposals agreed to by the HSE Board today (7 December) based on a presentation of the outcome of the recent consultation on the fee-for-intervention scheme (FFI) – part of the government’s‘Good health and safety – good for everyone’ framework unveiled in March.

Almost 300 responses to the consultation were received and the HSE also held face-to-face dialogue with some 80 trade associations and companies. Seven key concerns were identified as being raised by the majority of consultees:

• A change in priorities by the HSE in order to maximise its receipts;
• Damage to the constructive relationship between the regulator and
  business;
• The definition of ‘material breach’ and reliance on individual inspectors’
  opinions, or judgements;
• The ‘trigger’ for implementing FFI;
• Whether or not local-authority regulators should be included in the
  scheme;
• The financial impact on businesses – particularly SMEs; and
• The integrity of the disputes process.

SE programme director for the scheme Gordon MacDonald told the Board that these concerns were common to most respondents, whether they were for or against. Some of them, he said, could be addressed fairly easily – such as by issuing guidance on what constitutes a material breach, and translating the regulator’s Enforcement Management Model (EMM) into ‘lay’ language so that people can better understand how inspectors operate within defined policies and procedures when making judgements.

As the majority of respondents were against including Local Authorities within the scope of the scheme, the Board agreed that they would be excluded.

With regard to the concern that the HSE would, over time, come to rely on FFI receipts and thus they would start to drive what the regulator does, Mr MacDonald emphasised the need for a “clear line on this” from the HSE Board. A focus on priority actions together with “a clear account of how we’ve delivered” – such as a publicly available report on the scheme’s first year of operation – would provide the transparency stakeholders require, he said.

The relationship between the regulator and the regulated will not suffer, he claimed. “You will not see a different HSE as a result of this scheme. We will only apply FFI where it is warranted, and not frivolously.” Essentially, the cut in HSE resources has required it to spend more time securing compliance from high-risk businesses and poor performers, so the regulator will naturally be spending more time with companies where there isn’t a mutually supportive relationship in the first place.

The new approach will obviously have a financial impact on those companies whose non-compliance requires the intervention of the HSE, and many consul tees were concerned that the hourly rate – which has now been decreased to £124 per hour from the initial estimate of £133 – could be difficult for businesses in the current economic climate, particularly SMEs.

Some suggested that ability to pay should be factored in, or that the fee should be a flat one, or based on company size but, as MacDonald explained, the HSE is bound by Treasury rules on this, in that it must recover its full costs providing they are reasonably incurred.

As for the impact on SMEs, he pointed out that, given the HSE’s plans for proactive inspections and estimates for reactive investigations, the businesses potentially affected by FFI compared to the total population of businesses is likely to be around 1 per cent or less of all UK enterprises.

Finally, in the case of fees being disputed, there will be independent, external input to the final stage of the process to avoid the HSE being seen as judge and jury”.

HSE chair Judith Hackitt expressed the wish of the Board to proceed with the scheme on the basis outlined in the proposals document. Consequently, the HSE will recommend to the minister for employment the draft Health and Safety (Fees) Regulations 2012, to come into force next April.