Friday, 24 August 2012

Fee For Intervention (FFI) – What businesses need to know

From October, the Health & Safety Executive will have the power to charge a business, whenever it finds a health & safety breach, or “contravention”, at the rate of £124 per hour under a new charging regime called “Fee For Intervention”.

We spoke to Alastair Hall, Head of Health & Safety at compliance specialists Citation plc, about what these changes mean for business owners. 

Why is the HSE charging businesses for its time?

The HSE has had its budget cut by 35%. To bridge that gap, the Government has imposed a legal duty for the HSE to recover its costs from non compliant businesses from October.

The HSE has already closed down its free helpline, which took over 750,000 calls per annum to assist businesses and the public. This would appear to be the end of free verbal 1-2-1 health and safety advice in the UK.

What are the chances my businesses will be inspected?

There has been a reduction in the number of proactive HSE inspections. The HSE must spend a greater proportion of its time on securing compliance from high-risk industries and duty-holders businesses and poor performers rather than helping more compliant businesses improve. So the focus is on finding this rather than on helping businesses to improve. This is a shift in approach. Presumably to ensure it can recover all of its budget deficit. However, the HSE does have the power to conduct unannounced inspections and will do so where it feels necessary – so no business is “safe” from scrutiny.

Also, since business owners have a duty to comply with RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995), businesses will be on the HSE’s radar through any reportable accidents, incidents, whistleblowers or complaints made by members of the public.

So if the HSE inspects my business premises I’ll be charged £124 per hour?

Not necessarily. You will only be charged if, and from the moment, the HSE finds a contravention.

The charges will include the time it takes the inspector for writing and sending you an email or letter, and the time it takes to deal with documenting the contravention.

How have these charges been quantified?

The HSE has calculated the following costs whenever a contravention is found:
  • Inspection resulting in an email or a letter: £750 (or six hours work) 
  • Inspection resulting in an a notice being issued: £1,500 (a day and a half’s work) 
  • To investigate an incident taking 4 days of a HSE Inspectors time £4,000.
  • Full investigation – Could be tens of thousands of pounds.

For multiple contraventions, these charges are likely to be higher, particularly where more than one inspector or a specialist support is needed.

Is there a limit on how much my business can be charged?

Theoretically, no. However in practical terms, the FFI charges can only be stopped by one of the two following things taking place.

1) You resolve the contravention(s) by the time the HSE inspector conducts a follow-up inspection – the time for which you will also be charged for.

2) When court proceedings are issued following your failure to comply with HSE enforcement notice. Your business will still be liable for any billable time up until that point.

FFI charges are of course aside from any fines and associated legal costs associated with any charge brought to your business by the HSE. 

What are the risks to business owners?

We find an average of 24 contraventions on a first health & safety visit to a new client, regardless of whether they already have systems in place.

When you consider this with how the HSE has calculated its costs, there is a significant financial risk, which many businesses will already be exposed to without even knowing it.

Why haven’t we heard of these changes in the press or from other compliance companies?

The HSE has always stated that it will not actively publicise these changes.

Citation has been speaking about this for some time now, for example we have recently spoken to the BBC about what the FFI regime will mean for businesses.

However, there does seem to be a very small number of Health & Safety compliance providers who are actually talking about it.

Why do you think that is?

I think it’s mainly to do with confidence and service levels.

Also, most providers will not offer a warranty of compliance and won’t cover the FFI charges if their clients face them. Even most insurance policies that “protect” companies from legal action have multiple exclusions and a prospect of success clause.

To further my point about service levels, Citations Health & Safety consultants can be found on the Occupational Safety and Health Consultants Register (OSHCR) register, for example.

What should I do if I think my business isn’t covered?

The first thing to do is make sure your risk assessments are carried out and all related documentation is up to date.

Secondly, if you already have a compliance provider, make sure that you read the terms of your contract and, if you have an insurance policy, check it to see if you’re covered for FFI charges.

Any good provider will give you a written guarantee whereby, if you follow their advice and you still face charges from the HSE, they will pick up the costs on your behalf.

Does Citation cover FFI charges?

Yes. If our clients get into trouble with the HSE because they’ve followed our advice, we pick up the tab.

It’s important to state that we don’t do this with insurance, however. We used to sell an insurance policy with our services but we felt that, simply by offering it, we were undermining our service.

Our clients were, quite rightly, asking “why do I need an insurance policy if you’re giving me the “best” advice available?”

The answer was of course that, if what we’re saying is true, they shouldn’t need insurance. We decided to switch to an advice guarantee whereby we take accountability for the advice we give – that advice has to stand up to scrutiny in order for Citation plc to exist.

Our Advice Guarantee is unique in our industry, and it was one of the main reasons why our service won a Queen’s Award for Enterprise in the innovation category - so we know it works!

Citation plc are the UK’s leading Health & Safety and Employment Law compliance consultancy. If you would like to know more about the services of Citation plc, the HSE FFI Scheme or any other aspect of Health & Safety or Employment Law, please call 0845 844 1111.

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