Businesses found in material breach of health and safety law will from 1 October be charged £124 an hour for the HSE's regulatory work as it seeks to cope with sharp cuts to its budget.
But the regulator will get to keep less than half of the projected £37 million of receipts from the first full year of the regime, which will see inspectors charging employers for low-level enforcement activities for the first time.

HSE programme director Gordon MacDonald said that over the next three years the Executive is only allowed to retain a portion of the revenue from fee for intervention (FFI): 'The deal we have in terms of money is that the HSE will retain a certain amount of it over these three years; if it exceeds that then the money will go to the central coffers.'

Part of the HSE's original justification for FFI, which will enable it to recover the cost of inspectors' time wherever they find a 'material breach' of safety law justifying a letter or enforcement notice, was that it would support the executive at a time of budget cuts. The government's 35 per cent cut in the HSE's funding will leave the regulator around £80 million a year worse off from 2014/15.

The cost recovery scheme - Fee for Intervention (FFI) - came into force on 1 October in England, Scotland and Wales. Under the Health and Safety (Fees) Regulations 2012, those who break health and safety laws are liable for recovery of HSE's related costs, including inspection, investigation and taking enforcement action.

Under FFI, the HSE will only recover costs from dutyholders in material breach of the law. Those who are compliant, or where a breach is not material, will not be charged FFI for any work that the HSE does with them.

The HSE has published guidance which includes examples of material breaches but makes clear these do not cover every scenario where FFI might apply.