Industry calls for clarity over HSE's 'inflexible' FFI scheme

Hannah Jordan
Friday, August 3, 2012

SMEs up and down the country are furious over proposals to levy an hourly fee for investigating H&S breaches at the discretion of HSE inspectors

In 2011, when the coalition government outlined plans to focus, during its term in office, on cutting unnecessary red tape, reducing the burden of bureaucracy and simplifying antiquated legislation for SMEs, business owners naturally believed – or rather hoped – that this would free up vital resources, create efficiencies and generally improve their daily operations.

It is hardly a surprise then that Health and Safety Executive (HSE) proposals to introduce a new charging system for companies that are found to be breaking the regulations has been met not just with disappointment, but by outrage from both the print industry and the wider business community alike.

Due to come into force on 1 October 2012, subject to its parliamentary approval under the new Health and Safety (fees) Regulations 2012, the Fee for Intervention (FFI) will see those businesses found to be "in material breach" of health and safety regulations forced to foot the bill for all HSE inspections and administration related to the contravention – from initial identification by an inspector, through to the conclusion of any regulatory action deemed necessary.

The FFI is, in effect, a cost recovery scheme that is intended to shift the cost burden of health and safety regulation from the public purse onto those businesses that are found to be breaking the law. Not such a bad idea in theory perhaps, but drilling down into the fine print, small businesses owners are right to be concerned.

According to the guidance on the application of the FFI, which is published on the HSE website, companies no matter how large or small that are found to be in material breach of the law will have to stump up a fee of £124 per hour under the scheme. The figure is calculated by the HSE based on the amount of time an inspector has to spend identifying the breach, investigating and working with the company to rectify it. It does not, however, include administration costs involved with preparing and serving notices, legal correspondence, employing third-party assistance, reviews, research related to the breach, information gathering or costs involved in obtaining statements. Ergo £124 per hour is simply the starting figure.

Breach questions
But what constitutes a "material breach"? The HSE describes a material breach as "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 dutyholder" (the employer).

It goes on to list a "range of scenarios that might trigger FFI" but states that the illustrations are only indicative of what an inspector may cover on a visit and is not an exhaustive list. Grouped under four headings: health risks, safety risks, welfare breaches and management of health and safety risks, the scenarios include obvious things, such as solvent drums left open and failure to properly guard access to the in-running nip of rollers on machinery. But bosses are quite rightly demanding clarity.

BPIF head of health and safety Simon Lunken says the print industry particularly needs clear confirmation of what constitutes a material breach. "We want the HSE to clarify this because an inspector could visit any of our member companies and find a fault with them, but it depends on the individual inspector andwhat is driving them to intervene with the businesses," he says.

Lunken believes that without full clarity, smaller print businesses without greater resources and infrastructure could find themselves falling foul of the FFI, which with its £124 per hour fee, could land them in serious difficulty. "Legislation must be meaningful and not overburden the industry," he adds.

The proposals were originally scheduled for implementation on 3 April this year, but questions raised in consultation around the ambiguous nature of the material breach and the appropriateness of the charges are only now being scrutinised by a House of Lords committee.

The Forum of Private Business (FPB) has submitted a list of concerns to the committee including the suggestions that putting the HSE in a cost recovery position could result in inconsistencies in inspections and that the fees should be scalable according to the size of the business.  But the HSE has confirmed to PrintWeek that the proposals will not be amended before 1 October, although a review of the FFI will be published after 12 months.

FPB chief executive Phil Orford says the current proposed system is likely to create a "postcode lottery" for businesses and calls the scheme inflexible and unclear.

"We need health and safety law enforcement that effectively polices workplace safety and security, but does not punish firms unduly for breaches that are not substantial and are genuinely made in error," he adds.

BAPC chairman Sidney Bobb agrees: "I would suggest that not all businesses follow health and safety requirements to the letter because it would almost be impossible for a small firm, and so they could find themselves caught out unfairly."

"Large companies have the infrastructure and resources in order to properly manage health and safety requirements, but micro and SME companies simply don’t have that – they aren’t trying to breach or bypass the rules, they are just trying to earn a living," Bobb insists.  

Bobb echoes the FPB on its calls for greater consultation, but adds that any further review should not be carried out by health and safety experts. He adds: "This has been designed by white-collar workers for white-collar workers. There needs to be consultation with people at the coalface to see how this could really affect them."

And he warns: "We are now in a double-dip recession – it is surely obvious that this is not the time to be adding to red tape and fees. This could really be the straw that breaks the camel’s back for some."

A response by Gordon MacDonald, programme director at the HSE, to the points raised above can be found here.

30-second briefing

  • The HSE is to introduce the Fee for Intervention (FFI) from 1 October, under the new Health and Safety (fees) Regulations 2012
  • Under the FFI, businesses that fail HSE inspections and are found to be in "material breach" of the law will be forced to pay charges of £124 per hour for the time an inspector spends working with a company from identification of the breach through to its conclusion
  • A material breach is when an HSE inspector believes there is a breach of law that requires them to write to the business or employer
  • Businesses including those in the print industry have raised concerns about the ambiguity of the "material breach" and requested clarity within the HSE’s guidance
  • The Health and Safety (fees) Regulations 2012 that implement the FFI are still under scrutiny in the House of Lords, but HSE confirms there will be no amendments before 1 October
  • The HSE will publish a review of the FFI and its impact 12 months after implementation



Will the HSE’s FFI ma ke for a fairer business landscape?

Simon King, managing director Blackfriars
"It sounds okay in theory, but in practice this won’t work. People that break H&S laws beyond a certain degree, need locking up not just fining, but normal law-abiding companies, such as ours, can sometimes fall into a trap that they aren’t aware of. If someone can charge £124 per hour, that could be a recipe for disaster. And the breach has been left open to interpretation. I thought one of the government’s remits was to reduce the burden on SMEs. Surely this is just adding to it? We won’t know what effect it will have until it is in place."

Alec Sharples, director, Fineline Printing
"This is another example of the government deciding to do something and the poor bloody infantry having to pay for this particular department’s ever-widening remit. The worrying part is that it is at the discretion of the local HSE inspector. It is not satisfactory for one person to decide what is necessary or proportionate. I can see small companies with limited resources being absolutely clobbered. I understand what they are trying to do, but there is no reason why HSE costs can’t be reclaimed through a court of law."

Mike Moradian, managing director, Print Express London
"I’m worried that there will be an almost irresistible urge to write to someone on the basis that they can claim £124 an hour. I’m very concerned that some individuals at the HSE might be tempted to use this fee as an additional revenue stream. If someone is breaking the rules HSE has ample opportunity to take them to court and get costs back that way and that is part of the justice system, which is right and fair. I don’t think that HSE inspectors should be both judge and jury."


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