Exclusive: Research from law firm Clyde & Co suggests fees for intervention scheme is loss-making
The industry鈥檚 safety watchdog the Health & Safety Executive (HSE) lost 拢6m running its controversial fees for intervention (FFI) scheme last year, according to research by law firm Clyde & Co shared exclusively with 黑洞社区.
Under FFI, which was introduced by the HSE in 2012, contractors are charged 拢124-an-hour for an inspector鈥檚 time if a safety breach is found on site.
The HSE had hoped the scheme would help it recover more of its costs at a time when it faced a 35% cut in its budget from the then coalition government.
However, law firm Clyde & Co, using data obtained under the Freedom of Information (FOI) act, claims the scheme is loss-making.
Clyde & Co says that according to the FOI data it has obtained the HSE鈥檚 receipts for FFI in the last financial year to March 2016 show it collected 拢11.4m, but put the cost of running the scheme at 拢17.4m, resulting in a 拢6m loss on the scheme for the year.
In its response, the HSE disputed Clyde & Co鈥檚 拢6m figure, saying invoices raised from FFI actually stood at 拢14.7m not 拢11.4m, although it was unclear whether this figure equated to money invoiced or actually collected.
According to Clyde & Co, the HSE forecast prior to introducing FFI that it would reap revenue of 拢43.6m a year during its operation. But the law firm says the FOI request disclosed that in the four full financial years the scheme has been running the HSE has only invoiced 拢35.6m in FFI charges and collected 拢26.3m of that figure.
The HSE is currently facing a judicial review challenge to the FFI scheme by an outsourcing firm, with a final hearing scheduled for May.
Rhian Greaves, legal director at Clyde & Co, said: 鈥淭he HSE is pouring resources into administering the FFI scheme but it is currently losing, rather than making, money.
鈥淲ith the scheme now consistently operating at a loss and some distance from achieving its aims, you have to assume that further changes are likely.鈥�
A HSE spokesperson said: 鈥淚n 2015-16, HSE raised invoices amounting to 拢14.7m (not 拢11.4m) of the 拢17.4m total cost of the regulatory work, which was previously funded by the taxpayer.
鈥淭he actual cost of the regulatory effort was 拢2.7m higher than that invoiced to dutyholders under FFI. This cost represents all aspects of HSE鈥檚 work not just the administration cost of running the scheme, which is a very small element of the overall cost of FFI.鈥�
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