Charges for state inspections will hit small firms hardest

NAMM 2007 - Mr Jobsworth.

Concerns over 'revenue generating' inspections. Image: Eleventh Earl of Mar

Proposals for ‘elf’n’safety’ jobsworths to charge for inspections

ECM Plus +++ Draconian new state proposals to charge small enterprises for ‘material’ faults found during inspections by the Health and Safety Executive could damage relationships and may be seen as a way to ‘raise revenue’ rather than improving compliance, says the Federation of Small Businesses in response to a consultation which closed Friday.

In a classic case of ‘mission creep’, the HSE quango is proposing to ‘extend’ its current systems of ‘cost recovery’ to include a ‘fee’ for ‘intervention’ where an inspector will charge for the inspection and any subsequent actions when a ‘material’ fault has been found.

Apparently, the HSE claimed that it estimates that for an inspection that results in a letter, the cost to business could be at least £750.

For a small or micro business, a bill of £750 or more for a material fault could be extremely damaging especially during difficult economic times, the FSB said.

The non pro rata punitive proposal currently states that micro firms will in general receive the same level of fees as large businesses. FSB said this will disproportionally affect micro firms as fees of this level will have a greater affect on the ability of the business to function and grow.

The FSB said it is concerned that small firms may view the proposal as a ‘revenue generating exercise’ which could damage the quango’s relationship with business.

Worryingly, the proposal fails to clarify whether the money raised would go to the HSE or to the Treasury, the FSB stated.

The FSB believes that if it goes to the HSE small firms could fear that their inspection has been influenced by the need to raise money – especially as the context for this consultation is a 35 percent budget cut to the HSE.

FSB said it believed it was important that businesses have a good working relationship with the HSE to enable them to ask for help and support to ensure they achieve compliance.

With the possibility of a hefty fee over their heads they may be less likely to want to ask for help and compliance may suffer, the FSB added.

Furthermore, those businesses that wish to challenge the result of their inspection may have to cover the whole costs of the dispute if their complaint is not upheld. The FSB said it was therefore concerned that many businesses will feel pressured to pay the fees and not appeal even if they have ‘just cause’ due to the potentially large and undefined costs of a dispute process.

John Walker, National Chairman of the British Federation of Small Businesses, commented: “The FSB has a real concern about these proposals as they stand. Not only could they add to the fear that many small businesses have about health and safety regulation, but could have a serious impact on their relationship with the inspector, which if positive can help compliance to the benefit of the business and society. “£750 is a hefty fee for small and micro businesses especially during difficult economic times. Most small businesses do not have the same resources that larger firms have to buy-in expert help and yet they are required to be experts in a wide range of complicated regulations. Instead of penalising them with large bills, the HSE should be there to help and support small firms to be compliant. For many small firms this proposal will be seen as anti-growth.”


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