Health and Safety: Fee for intervention

The Fee for Intervention (FFI) came into force in the Autumn of 2012 and significantly changed the way in which the Health and Safety Executive (HSE) charges companies for breaches in health and safety regulations.

But despite some forewarning – The Manufacturer published advisory articles on the change last year – and a bedding-in period, many companies remain unaware of the implications of FFI.

They are likely to get a rude awakening. The HSE issued its first invoices in January with the aim of raising £40m through FFI by the end of the year. The new policy is openly acknowledged by many expert commentators as a way to help plug a 35% cut to the HSE’s budget as well as raise revenues for the Treasury.

By charging a staggering £124 per hour for inspection following a health and safety breach, the HSE can recoup its costs including those incurred through back room staff and independent invoicing.

Putting safety first?

FFI is triggered when an inspector finds a material breach. This is when something is contrary to health and safety regulations but is not serious enough to warrant anything more than a letter to the offending party demanding the breach is put right.

Fears are already growing within the sector that FFI will damage the working relationship between the HSE and manufacturers.

Kay Moss, health, safety and environment advisor at Muntons, the malt producer, says, “I always felt that I could ring our local inspector and have a chat with him. I don’t feel that I would be as comfortable doing that now purely because if they decide to come on site and we are doing something minor wrong I could end up costing the company money. The policy is instilling a fear factor into manufacturers.”

If FFI does make companies reluctant to consult the HSE over health and safety issues for fear of having to pay costs for minor infractions, the policy could make workplaces less safe.

FFI is already affecting smaller manufacturing businesses says Duncan Reed, associate at TLT Solicitors, which specialises in dealing with FFI. “The HSE focuses on smaller businesses and goes for smaller fines because they are more likely just to pay up. Without doubt it makes things more difficult for smaller businesses.”

At time of writing, the HSE had only released financial details for the first two months of the scheme which started in October 2012. It issued 1,418 FFI invoices which raised more than £700,000 with 70% of fines being less than £500.

But Gordon MacDonald, programme director at the HSE, who helped set up FFI insists the HSE is not out to target smaller firms for easy FFI pickings. “In the broader context is life easy for SMEs? The answer is no, they face challenges on a whole range of fronts but we have been trying to make it easier for them,” he said.

The HSE has sought to help smaller manufacturers by developing its website to teach companies how to fill in risk assessments. It has also set up a registration scheme for occupational health and safety consultants to help companies who feel they need extra independent advice which has gone through some kind of quality check. However, at the same time the HSE advice line has been cancelled due to budget constraints.

According to Mrs Moss this hasn’t done much to appease manufacturers: “I’ve heard bad things about the register. If I need a consultant I go by word of mouth or past experience – I would never pick someone I’ve never heard of before.”

FFI playing fair?

Smaller manufacturers are feeling the pinch of FFI. But it is becoming an additional embedded cost to large businesses as well.

“I think that a lot of larger clients just see it as another tax on business so a lot of the top 250 companies just write it off and decide that once a month they are going to spend £1500 on the HSE inspector,” says Paul Verrico, principal associate at law firm Eversheds.

“Companies have to pay regular tranches of cash to the HSE to the point where it has almost become a cash flow issue for them,” continues Verrico.

When setting up the scheme the HSE discussed charging smaller manufacturers, who are less able to pay, less than big companies. They rejected the idea as they thought it important that all companies pay the same for the amount of the HSE’s time they take up.

But developing issues around consistency in the application of FFI rules is likely to throw up mounting resentment about this already controversial decision. The same violation that might only warrant a quiet word from one inspector could result in a large fine from another.

“I definitely worry about consistency,” says Mrs Moss. “I would be nervous if the HSE sent someone fresh out of training who didn’t have any industry experience and couldn’t see a bit of grey.”

But Mr MacDonald remains firm in his belief that controlling the costs of FFI is the responsibility of individual companies. Pre-emptive action, commitment to consistently high health and safety standards and rapid response to breaches will protect firms from any potential negative impact from the scheme he says.

“We are putting the minimisation of costs in the hands of business. The quicker businesses put things right the less they will have to pay as we will have to put less effort into that process. If you comply with the law you don’t have to pay anything.”

The policy has given the HSE real teeth to motivate companies to correct material breaches more quickly than they have in the past. But David Keene, MD and founder of Birmingham-based SME RDM Automotive is still dubious about the practical and moral implications of FFI on approaches to health and safety in industry.

“A government body is funded by the taxpayer and should not be double funded by companies who are doing their best to keep up with ever changing regulatory landscape,” he sums up. “Rather than jumping to charge a fee, the first steps should be to help rectify the issues in a company if that company has tried to comply.”

The HSE will assess the impact and effectiveness of FFI once the policy has been in place for a year.