HSE – To Charge, Or Not To Charge?

As part of its austerity programme, the Government announced early in 2011 that the Health & Safety Executive would have to find budget cuts of 35% by 2014.

The reaction of the HSE to this challenge has been to reduce planned inspections by a third: to focus the remaining inspections on high-risk industries: and to introduce a charging system for ‘intervention activity’ to recover its costs in such cases.

Although there are cost-recovery schemes in place in certain industries, and it is already in principle a Government policy, its extension in this fashion is controversial and the British Safety Council is surveying its members on the proposals. The ‘Cost Recovery Consultation’ ended on 14 October 2011 and anyone wishing to see  the proposals can find them on the HSE website.

Who will have to pay?

The Consultation is really about how the scheme will work in practice: it is almost certain that charging will go ahead, probably from 6 April 2012.

A charge will be made where in the opinion of the HSE Inspector there has been a ‘material breach’ of Health and Safety laws by ‘duty holders’.

A ‘duty holder’ is an organisation (not an individual) and there may be more than one: for example in a building project there will be principal and sub contractors, and they may be held liable to differing degrees and charged proportionately. (Breaches of CDM Regulations such as a failure to adhere to the plans set out by your CDM Co-ordinator would be included in this process).

If the Inspector verbally advises you to remedy a minor breach and you do so, there will be no charge. But if there is a written notification (even just an email or a short letter), the time clock starts ticking, at a rate quoted as £133 per hour. If the Health and Safety Laboratory do testing work, their costs are (significantly) extra.

Industries that already have charging regimes include offshore oil and gas, pipelines, nuclear and some chemical operations. These will remain unchanged. Likewise the fees for licensing certain activities like asbestos removal or the manufacture or storage of explosives) will continue, although in these cases inspection fees might be applied as well if there are perceived breaches.

No Micro-business Exemption

Despite an announced Government policy to grant small businesses with less than 10 employees a ‘moratorium’ on any extension of regulations, they are not being granted an exemption to these rules. Only the self-employed escape them, unless they cause a risk to others.

This has already caused criticism that it runs counter to the policy goal of reducing the burdens on businesses.

How Much?

HSE estimate as follows:

• Inspection and no action: Free
• Inspection then a letter: £750
• Inspection then an Enforcement Notice: £1500
• Investigation: £750 rising to maybe ‘tens of thousands’

Clearly this could present a major expense, especially for smaller firms. Payment is expected within 30 days of the invoice.

Potential Problems

As HSE itself writes, “It is anticipated that the new regulations would place a ‘Duty’ on health and safety regulators to recover costs”. It is precisely that Duty that gives rise to fears that they will compromise the independence of the Inspectors (despite the assurance that they will be expected to exercise discretion). If they are given financial targets, this would encourage fines, in the manner of traffic wardens.

When a company is charged, it may seek to defend itself. This generates time and cost all round. Senior Inspectors then have to get involved, diverting them from their enforcement and educational duties. HSE propose to charge firms whose appeals are rejected, at a further £133 per hour for what could be a lot of hours of administrative time.

Conversely, the BSC has warned that some companies may seek to pay the fine and pay off any injured parties, and thus avoid addressing the root causes of their Health and Safety failings.

One concern is that although Local Authority inspections are exempted at present, it is still possible that they may be added into the plans from 2012. This would open up a whole swathe of low-risk businesses to the possibility of fines: hard-pressed councils would be highly motivated to recover the costs of their Inspectors, who are also facing a similar budget cut to that of the HSE.

What Should I Do?

As an employer, you are now more likely to receive an inspection in the targeted ‘high-risk’ industries that include Construction, Waste & Recycling and certain manufacturing activities such as those involving wood or molten metal.
You should of course be exercising Best Practice and have all your Risk Assessments up to date and being acted upon, as well as maintenance regimes on equipment. For many employers it is too much to cope with unaided: and it is advisable to seek help from a professional firm of Health and Safety Consultants and (in the building trade) CDM Co-ordinators. Whereas you may have worried about the cost of safety consultants, their worth will be all the greater now that the risks of non-compliance are about to soar.

McCormack Benson Health & Safety offers pro-active advice and practical assistance to firms, using local, professional consultants who know the problems that changing legislation present to employers; and who never forget that they are on your side.