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Tuesday 16th April 2019
From the archive: Just so you know, this article is more than 3 years old.
FFI was designed to recover costs incurred by the HSE during regulatory action against organisations that fail to comply with safety and health law, thus transferring the financial burden from the taxpayer to the business.
The new charge came into effect on 6 April and it is the second increase since the scheme was introduced in October 2012. The rate first went up in 2016, from £124.
In a statement, the HSE said this can be attributed in part to the fact that the scheme has operated recently at a deficit.
In 2017/18 the HSE reported a £1.9m loss from running FFI after the £15m it generated from fines to businesses was offset by its operating costs, which totalled almost £17m.
It said: "HSE's cost recovery rate for FFI will increase to £154 per hour with effect from 6 April 2019. This means that businesses that are found to be in material breach of health and safety law will be charged at this new rate. As now, those businesses that meet their legal requirements will not pay anything for HSE's regulatory activity.
"HSE must set the FFI rate with the aim of recovering its full cost and in recent years it has operated at a deficit (i.e. cost more than recovered in income). A combination of this and cumulative inflationary pressures support the increased hourly rate."
A material breach is defined by the HSE as "something which an inspector considers serious enough that they need to formally write to the business requiring action to be taken".
Speaking to
IOSH Magazine, Charlotte O'Kane, associate at law firm Pinsent Masons, said: "The fee was originally £124 per hour to cover inspectors' time and that went up [in 2016] to £129 per hour, which is a relatively small increase. This is a much more significant jump and dutyholders will notice a difference in their FFI invoices given the roughly 20% increase in the hourly rate for HSE inspectors.
"It serves to emphasise the fact that organisations should ensure that they are complying with the law and operating safely. If an HSE inspector finds a material breach of health and safety law, that is now going to be significantly more expensive."
Under the scheme, the HSE only recovers costs of its regulatory work from non-compliant dutyholders found to be in material breach of safety and health law.
The fee covers an inspector's time spent identifying and resolving the issue, as well as any investigation or enforcement action up to the point where HSE's intervention has been concluded or a prosecution is started, or in Scotland when a report is submitted to the Procurator Fiscal. It is calculated by multiplying the time spent on FFI activity by the hourly rate.
Commenting on the increase in this month's health, safety and environmental newsletter, law firm Weightmans said: "This represents a substantial increase and invoices may amount to thousands of pounds so businesses in receipt of these invoices should check them closely and, if appropriate, challenge the charges by raising a 'query' within 21 days of the date on the invoice.
"As the charges may only be imposed once written notice of a material breach has been given, it would be wise to deny the material breach even if paying the invoice for other reasons."
