“Do the maths” – HSE publishes proposals for recovering its costs from non compliant duty holders

26 Jul

The HSE issued a consultation document on 22 July 2011 containing proposals to place a legal duty “on HSE to recover costs where duty holders are found to be in material breach of health and safety law”.  The British Safety Council will shortly be consulting its own members in Great Britain concerning the proposals through an online survey and face-to-face meetings. The importance of this particular consultation cannot be overestimated.  This impact of this particular regulatory change is not solely about a transfer of the burden of meeting the costs of tackling non-compliance from the taxpayer to the regulator.  It raises questions too about the relationship between the regulator, that is HSE, and duty holders and the policy and practice concerning HSE enforcement. For the present the cost recovery proposals apply only to the work of HSE not to the equivalent work undertaken by local authorities.

The consultative document makes clear that HSE would not have discretion on whether to apply fee for intervention. Rather HSE would be under a duty to recover the costs of its intervention activity where there had been a material breach of health and safety law.

An average hourly rate of £133 would be used for all HSE staff with the costs of specialist support staff added where required. The preferred option in the supporting impact assessment, that is option 6, estimates that the “the benefit to the taxpayer equal to the sum of costs recovered from businesses” would be approximately be a maximum of £46.3 million per year. Doing the maths produces a figure of some 323,000 chargeable hours to generate the revenue necessary to recover costs of £46.3 million. If we make a working assumption that each intervention, where costs are to be recovered, averages out at 10 hours of HSE time we can expect to see some 30,000+ interventions per year. What will be the consequence for HSE of not generating the additional income from cost recovery that will be built into its budget for 2012/13 and beyond?

These are significant sums of money both for the organisations who will have to bear the costs and for HSE who from April 2012 will have to recover these costs in order to carry out its full range of statutory responsibilities.

The HSE consultation document can be accessed at http://www.hse.gov.uk/consult/condocs/cd235.htm  and the impact assessment can be accessed at http://consultations.hse.gov.uk/gf2.ti/f/15138/393893.1/pdf/-/CD235%20Impact%20assessment.pdf

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