Proposals to charge small firms for ‘material’ faults found during inspections by the HSE could damage relationships and may be seen as a way to raise revenue rather than improve compliance, Federation of Small Businesses (FSB) has warned in response to a consultation which closes today.

The HSE has proposed 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. The HSE estimates that for an inspection that results in a letter, the cost to business could be at least £750.

The FSB argues that 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 proposal currently states that micro firms will in general receive the same level of fees as large businesses.

The FSB’s response warns that this will disproportionately 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 has also raised concerns that small firms may view the proposal as a revenue-generating exercise which could damage the HSE’s relationship with business.

The business group says it is worrying that the proposal fails to clarify whether the money raised would go to the HSE or to the Treasury. The FSB believes that if it goes to the HSE, firms could fear that their inspection has been influenced by the need to raise money – particularly in the context of the 35% budget cut to the HSE.

John Walker, National Chairman, Federation of Small Businesses, said: “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.”