What the HSE spending cuts will mean

by Michael Smith
NBS Information Specialist

The Government has announced a package of changes to the UK's health and safety system, indicating that much of the cuts can be achieved through 'administrative savings'. However, in a recent report, an All-Party Parliamentary Group on Occupational Safety and Health believes that cuts in prevention are a false economy and any reduction in the Health and Safety Executive's (HSE) activities will lead to increased costs from sickness absence, compensation and benefit costs. This article looks at the report.

Cost cutting

While an element of cost reductions is always possible in any organisation, it is unclear to the All-Party Group how the HSE will be able to achieve significant savings without reducing its ability to operate as a regulator.

The bulk of the HSE budget is spent on payroll costs. Of that, around half is on inspectors and the rest on a range of other administrative and support functions.

Much of the remaining costs are in areas such as policy, guidance and advice, and this is one area that the HSE is seen to excel in. Its guidance is often used as the international standard, in particular in areas such as chemicals, stress and musculoskeletal disorders. Its website is also considered to be one of the most accessible and user-friendly in its field.

The HSE unions, FDA, Prospect and PCS, estimate that the cuts could remove up to 750 jobs. This means that even if all frontline posts were protected, the time spent on inspection would drop significantly as inspectors were diverted to perform some administrative tasks. While it may be possible to pool some support services, any significant reduction in administrative or IT support could have a considerable effect on the ability of frontline staff to operate.

In a neat twist to the current situation, the All-Party Group has, in the past, argued that the number of inspectors the HSE employ should actually be increased.

The presence of inspectors in the workplace, or the possibility that they may visit, is a major driver for behavioural change by employers. In general HSE inspectors are seen to play a positive role with almost 90% of employers claiming that HSE visits are 'helpful'.

What the cuts will mean

The All-Party Group believes that cuts in the HSE service will lead to a much higher cost to the government as a result of increased benefit claims from those on long-term sickness and higher NHS costs.

The government has indicated that it expects the HSE to increase its revenue from charging. At present the HSE reclaims all or part of the cost of its inspection and enforcement activity from certain sectors or activities. This includes the nuclear sector, oil and gas, and major hazards sites. It also charges for certain licensing requirements and makes a small income from the sale of publications.

The All-Party Group would support an extension of charging so charges were based on risk rather than on historical precedent, but believes there are limits to what can be raised this way. There are also dangers that it could alter the way that the HSE operates, so this option would need careful management and industry consultation.

Construction industry

In April of this year, construction's largest union, UCATT, organised 21 memorial services across the UK for fatalities within the construction industry. In light of cuts to the HSE coinciding with the dropping of automatic health and safety inspections, health and safety within the construction industry has rarely faced as much scrutiny in the media.

Each death within the construction industry is underpinned by the dangers of the working environment. As a result, UCATT considers the number of risks increasing if the already low levels of inspections and enforcement are reduced.

Preliminary reports from the HSE suggest the number of construction related deaths is already on the rise; however, commentators put this down to the already stretched situation that the HSE is in. Industry experts note that the increase may also be down to increasing client demands and corner-cutting during the recession. The provisional statistics revealed that the 2010/2011 period saw an increase of 15% on the previous year's low of 42 deaths.

The return of Dodge City Developments

With the spectre of fewer health and safety inspections in the construction industry looming, the British Safety Council has suggested a public debate on how best to deal with the reality of fewer resources for public bodies involved in health and safety regulation. At the centre of the debate is how cuts at the HSE will result in the rising occurrences of rogue traders and of inspectors being increasingly unlikely to visit sites. In turn this will lessen the threat of prosecution and encourage corner cutting, ultimately creating an uneven playing field, in which rogue traders will be able to undercut legitimate businesses that are already vulnerable to cash flow pressures.

Careers in health and safety

As well as potential cuts to its budget, the HSE is already under pressure from the Department for Business, Enterprise and Regulatory Reform (BERR) to limit the number of on-site inspections it carries out. With fewer inspections, the responsibility to ensure a safe working environment lies even more with the organisation; effectively self-regulation, while HSE inspectors focus mainly on high-risk sites.

In this respect safety professionals can also make an economical argument for the increasing value of their role within corporations. If one health and safety incident occurs, the lost productivity and accompanying costs are often huge and ultimately hurt the company as a whole.

All-Party Group recommendations

As well as asking that the level of HSE funding be increased to meet the challenges that it will face in the period when Britain emerges from the recession, the All Party Parliamentary Group on Occupational Safety and Health recommends that:

• There should be no reduction in the inspection and enforcement regime
• Administrative savings are supported, but there should be an acceptance that the ability to make such cuts without reducing services is limited
• There is an increase in charges to high hazard industries to reflect the greater benefit to them of HSE activity
• The HSE continues to see the provision of enforcement, inspection, guidance, research and advice as an overall package
• The HSE retains the 60/40 split between proactive and reactive inspections
• The HSE is encouraged to maximise income from cost recovery for permissioning and related activities
• Consideration be given to increasing cost recovery for cases of non-compliance to reflect the full costs of regulation
• Cuts should not prioritise preventing injury at the expense of preventing occupational illness and disease.

The Group also recommends that the HSE continues in its support for SMEs, including simplifying guidance for this sector, where appropriate.

Conclusions

There is significant evidence that inspection activity influences behaviour by employers and if the number of frontline staff are reduced, or their activities curtailed, it will be likely to have a significant effect on the ability of the HSE to impact on injury and sickness rates; any reduction in enforcement activity would likely lead to an increase in injury rates.

By 2014 the HSE will have had to reduce its budget by approximately £80-£85m a year. This cannot be achieved by administrative savings and increased charging alone, which will leave the remainder to be met through cuts to the service it provides.

The All-Party Group believes that cuts in prevention are a false economy and any reduction in HSE activities will lead to increased costs from sickness absence, compensation and benefit costs. Furthermore, reducing expenditure on prevention does not fit with the government's stated intention of reducing the number of people on benefits, in particular incapacity benefit. In addition to this, the cuts are likely to lead to an increase in the number of industrial deaths, injuries and illnesses.

Further information

Report of the All Party Parliamentary Group on Occupational Safety and Health
http://www.ucu.org.uk/media/pdf/t/0/hsecuts_allpartygroupreport.pdf.

Related NBS information:

Articles:

• Corporate responsibility: the duties and responsibilities under the new CDM regulations

Selected links:

• Health and safety on site

October 2011

 

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