Draft cost recovery for the assessment of notifications for onshore 'boreholes'
This draft guidance provides advance notice of how cost recovery for the assessment of notifications for onshore 'boreholes' will work, subject to Ministerial and Parliamentary approval of the Health and Safety and Nuclear (Fees) Regulations 2016. This guidance may be revised before these Regulations come into force - a final version of the guidance will be published in advance on HSE's website.
Part 1: Cost recovery arrangements
This guide is aimed at operators of onshore boreholes and others entitled to drill boreholes that are subject to the requirements of regulation 6 of the Borehole Sites and Operations Regulations 1995 (BSOR). It provides information about how the cost recovery scheme operates, as well as details about the scope and nature of the activities undertaken by HSE, for which costs are recovered. It also explains how the costs are calculated and provides the hourly fee for 2012/13.
The fee boundary and what is cost recoverable
HSE will recover its costs for work associated with assessing notifications under regulation 6 of BSOR. Such work refers to all of HSE’s activities when dealing with a notification, whether these activities take place on-site or elsewhere.
The Health and Safety and Nuclear (Fees) Regulations 2016 allows HSE to recover the cost of these activities, from an operator of a borehole site or a person entitled to drill a borehole (ie a dutyholder), who has submitted to HSE a notification as required under BSOR.
HSE recovers the costs of its activities for certain onshore borehole sites under the Control of Major Accident Hazards Regulations 1999 (COMAH). No fee is payable under BSOR for any function where a fee is payable (or has been paid) for that function under COMAH. HSE publishes a Cost Recovery Guide for COMAH.
Cost recoverable activities
HSE will recover its costs, based on an hourly rate, for the time spent in assessing notifications submitted under the provisions of regulations 6(1), 6(2), 6(3), 6(4) and 6(5) of BSOR. This includes time spent on the following activities:
- desktop assessment work;
- on-site verification inspection work;
- meetings (wherever they take place);
- telephone conversations; and
- report writing.
Cost recovery rates are calculated in accordance with HM Treasury guidance on fees and charges, and include the full cost of carrying out the cost recoverable work. For financial year 2012/13, the cost recovery rate for boreholes notification work is £173 per hour. See Methodology used for calculating fees.
Costs will be recovered for the assessment of all notifications. Assessment includes all work associated with the provision of an auditable HSE decision record in accordance with HSE procedures.
The total amount of time spent assessing a particular dutyholder’s notification is cost recoverable. This includes time spent on planning the assessment, recording findings and communicating with the dutyholder to obtain further information. Dealing with third parties, such as consultants or agents engaged by the dutyholder to support the notification submission, is part of the assessment process and therefore cost recoverable.
Most assessment work takes place by consideration of the information provided in the notification. However, it may be necessary to supplement this with visits to the dutyholder’s offices for discussion and clarification purposes. The process may also involve a visit to the relevant borehole site.
Fees for assessment start as soon as the notification has been received and cover all stages in the assessment process, through to completion of appropriate records.
The fee for notification assessment ends at the point when the inspector has completed the assessment and the dutyholder has addressed any points raised. On some occasions, further assessment work may arise as the borehole operation is conducted, eg if changes to the notified borehole operation are made by the dutyholder, which then requires the inspector to revisit the earlier assessment.
Investigation work following an incident, complaint etc is not classed as assessment work and will be subject to Fee for Intervention if a material breach of the law is identified during the intervention.
Advice and guidance
Notifications can be greatly assisted by advance discussion between dutyholders and HSE. Dutyholders are encouraged to discuss and resolve such matters with HSE in advance of submission, thereby avoiding any subsequent difficulties. This work is not subject to cost recovery.
Who is subject to cost recovery?
The fees for boreholes notification work are payable by those who are dutyholders under regulations 6(1), 6(2), 6(3), 6(4) or 6(5) of BSOR.
Methodology used for calculating fees
The fee to be paid is calculated based on the time spent on the particular cost recoverable activity, multiplied by a pre-determined hourly rate. The costs recovered are calculated in accordance with HM Treasury’s guidance Managing Public Money, and includes the full cost of all the resources used in carrying out and supporting that cost recoverable activity. These costs are included in the Memorandum Trading Accounts prepared annually and which are set out based on six main headings. The costs included in these headings are as follows.
- Gross salaries of direct staff:
- staff actually carrying out the work, their line managers and support staff.
- Gross salaries of operational management and strategy:
- staff who deal with the consistency and quality of operational work, as well as finance and planning issues specific to that directorate.
- General administrative expenditure:
- accommodation costs;
- use of information technology;
- travel and subsistence;
- staff development and training;
- office services (eg postage and telecommunications);
- services bought from external suppliers; and
- any other appropriate costs that may arise.
- Corporate services:
- common services (eg finance and planning, human resources, senior management and business services).
- Capital charges:
- depreciation of fixed assets, cost of capital and insurance.
- Common good costs:
- developing and maintaining guidance for dutyholders;
- internal guidance for inspectors (eg to achieve consistency of regulation);
- consulting and discussing current problems and their effective control with dutyholders and their representatives; and
- industry-specific research and development.
Administrative and financial arrangements
HSE issues invoices and receives payments for all cost recoverable activities irrespective of who carried out the work, eg HSE or a contractor. HSE is responsible for debt recovery. Invoices identify each separate cost recoverable activity, including:
- date of activity;
- number of hours spent;
- the rate to be applied;
- the name of the inspector doing the work; and
- the total amount payable.
Invoicing and debt recovery functions are carried out centrally; inspectors are not responsible for the issuing of invoices or for any follow-up actions relating to non-payment of invoices. Queries on invoices should be referred to the contact point given under Contacts for advice and guidance.
Invoicing will take place within 30 working days of the end of a quarter. Invoices will be issued on the pattern of quarters March to May, June to August, September to November and December to February. Invoices will invariably contain costs for time outside these strict quarterly periods.
Payment will be due to HSE within 30 days of the date of the invoice. HSE will actively pursue outstanding debts in accordance with its debt recovery procedures.
HSE will prepare annual Memorandum Trading Accounts, which will be subject to scrutiny by HSE’s internal audit and also externally by the National Audit Office.
Procedure for handling queries and disputes
If a dutyholder has a query about an invoice, they should contact HSE to seek to resolve it informally. If it is not possible to do this, they should refer to the HSE procedure for handling queries and disputes.
It should be noted there are time limits at each level, within which queries should be submitted.
Procedure for resolving operational issues
Where matters of dispute arise on operational issues, which have implications for the cost recovery regime, these will first be considered by the Offshore and Onshore Boreholes Cost Recovery Review Group. This Group has the overall responsibility to keep under review the effectiveness and operation of the borehole cost recovery regime’s financial and administrative arrangements. The membership of the Review Group will comprise representatives from industry and trade associations, as well as HSE officials.
If the matter cannot be resolved by the Review Group, it will be referred to senior officials within HSE.
Contacts for advice and guidance
For further advice or queries on the operation of the cost recovery system, contact:
Health and Safety Executive
HID HQ 1A,
Email: [email protected]
For queries about making a payment, contact:
Health and Safety Executive