The FFI costs recovery regime, which has been in place since
October 2012, has imposed a duty on the HSE to recover its costs
for carrying out its regulatory functions against those found to be
in material breach of the health and safety laws. A material breach
occurs when, in the opinion of the HSE inspector, there has been a
contravention of the health and safety law by a business which
requires the HSE to issue a written notification to it.
When introducing FFI, the government set out the three main reasons
for introducing the regime as being: (a) to reduce public expense,
(b) to encourage companies to comply with the law and put faults
right swiftly and (c) to discourage companies from undercutting
competitors and putting their employees and the public at risk. The
government projections estimated that the introduction of the FFI
regime would result in the HSE eventually recovering approximately
£37 million per year. A Freedom of Information Act request in
November 2013 revealed that in its first year of operation the HSE
had raised just over £5.5 million from the scheme.
The Triennial Review Report published by the Health and Safety
Executive in early 2014 has indicated that the prevalent mood with
the relevant stakeholders was that the FFI regime was having an
adverse effect on the HSE's reputation for impartiality and
integrity.
In particular, it is reported that many stakeholders believe that
as a result of the regime's introduction the HSE is essentially
acting as the 'police, prosecutor, judge and jury' in
health and safety investigations. In addition, some feel that the
FFI was introduced as a way for the HSE to compensate for the
reduction in government funding, while others believe that the
subjective nature of the test regarding applicability of FFI does
not offer sufficient certainty or objectivity. The general feeling
appears to be that the issues with FFI, some of which are
highlighted above, are damaging the previously constructive
relationships between the HSE and businesses and has changed the
way the HSE is being viewed.
The Report accepts that the FFI is a significant part of the
HSE's business model and its potential withdrawal would have a
significant impact on its finances. However, it also acknowledges
that the concerns discussed above are important and need to be
addressed at the upcoming FFI review.
The Report recommends that the link between fines and HSE funding
be removed, or the benefits be shown to clearly outweigh the
detrimental effects, failing which the FFI should be phased out.
The Report also considers that as an interim, urgent measure, at
least one independent person should be involved at the first formal
stage in FFI appeals to ensure that the process is viewed as
independent and impartial.
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