The HSE has increased the amount that it charges under the Fee for Intervention (FFI) programme by 4%, in an apparent attempt to claw back some of its spiralling costs.
The new hourly fee of £129 – up from £124 – has been applied to invoices submitted since 6 April, the beginning of the financial year.
According to the most recent figures, for February/March 2016, the average cost of an FFI invoice was £650. At the new rate, this would become £675.
This is the first increase since FFI was introduced in October 2012. It was designed to recover the costs of regulating businesses that break the law, shifting the financial burden from the taxpayer to non-compliant businesses.
Income from the programme increased sharply in the year to April 2016, from £10.1m in 2014–15 to £14.7m. However, the staff and operating costs of the scheme also increased, totalling £17.4m compared to £11.9m the previous year, leaving a shortfall of £2.7m.
Last year, the HSE retained £11m, out of the £14.7m it generated through FFI.
However, along with the revised hourly rate, the Treasury has agreed to increase the amount of FFI revenue that the HSE can retain. In 2016–17, the cap is due to be set at £17m.
Applying the 4% increase in the cost of FFI would not have made the income generated by the scheme in 2015–16 match its costs. To cover its operating costs, the HSE would have to increase the hourly fee by around 18% to £147 per hour.