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February 25, 2013

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Rising costs of H&S compliance eroding business benefits of investment

The benefits of injecting more money into health and safety are being lost against rising costs in complying with regulations, according to a major survey of Britain’s manufacturing companies.

Manufacturers’ body EEF outlines its ambition to reduce the cost to business of dealing with health and safety requirements in the report, ‘Making health and safety work for business: Removing unnecessary health and safety burdens’, published today (25 February).

It believes this ambition can be realised by achieving the following health and safety benchmarks:

  • a minimum 10-per-cent reduction in time and money spent complying with health and safety regulation over the next five years;
  • a 50-per-cent reduction in the number of health and safety regulations on the statute book by April 2015;
  • at least a 20-per-cent reduction in time and money spent managing personal-injury civil compensation claims by April 2015; and
  • a minimum 10-per-cent reduction in administration costs associated with  compliance of health and safety regulation derived from EU Directives over the next five years.

To achieve these aims, EEF is calling on the Government to accelerate the pace at which it is reforming the UK health and safety system. In particular, it wants the consolidation of sector-based health and safety legislation and compensation reforms to be prioritised. It also demands the Government re-examine the benefits of consolidating all health and safety regulations into one statute, as well as explore the case of removing enforcement powers for health and safety from local authorities and bringing them under the umbrella of a single regulator.

Contained in the EEF’s report, the findings of a survey of more than 200 manufacturers reveal that in over 90 per cent of companies a senior manager gets involved with a serious incident investigation. Monitoring of health and safety performance by senior managers has increased by more than a quarter in the last seven years, which has coincided with a continued reduction in the number of reported injuries.

However, far from organisations viewing the health and safety benefits that have resulted from increased investment in a more positive light, rising costs of complying with regulations are outweighing the advantages in the eyes of many senior managers.

Seven in ten companies said they have experienced an increase in costs over the past three years, while almost 80 per cent confirmed an increase in time spent on health and safety compliance. Moreover, while the relationship with regulators remains, on the whole, positive – with six in ten companies viewing advice they receive from inspectors as helpful – the trend is downwards, as eight in ten viewed the relationship as positive five years ago.

The introduction of the HSE’s Fee for Intervention (FFI) scheme is unlikely to reverse this trend. Indeed, two-thirds of respondents were visited by the regulator during its dry run of the programme. Of those visited, a third were concerned that inspectors were simply interested in identifying material breaches rather than carrying out what the respondents considered to be a ‘normal’ inspection.

Terry Woolmer, head of health and safety policy at EEF, commented: “Industry has made great strides to make health and safety part of business best practice and senior managers are leading by example.

“Manufacturers are seeing benefits to their business from their investment in health and safety. But, at the same time, the cost of complying with health and safety regulation is increasing and manufacturers are becoming less positive about its benefits and their relationship with the regulator.”

The survey also reveals significant backing for the Löfstedt recommendations for health and safety reform – with the greatest support for consolidating core regulations into one statute, and qualifying regulations that impose strict liability by ‘reasonably practicable’. However, there were some divergences – in particular, most respondents said they are satisfied with how the RIDDOR regime operates. There were also concerns raised about exempting the self-employed from health and safety regulation and a lack of support for the withdrawal of the MHSWR ACoP.

Echoing Professor Löfstedt’s recent call for the Government to engage more actively with the EU on reforming health and safety, EEF pointed out that European directives continue to cause anxiety. Sixty-eight per cent of respondents do not fully understand the impact that the proposed Electromagnetic Fields Directive would have on their business, and 64 per cent believe there is no need for a Musculoskeletal Directive.

Responding to the EEF report, The TUC said any additional investment in health and safety from employers is welcome but it identified some parts of the report that raise important questions.

A spokesperson said: “There have been no new major new regulations on health and safety over the past three years, only changes to existing regulations, such as RIDDOR, which have been introduced under the guise of helping reduce the ‘burden’ on business. €

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Clive
Clive
9 years ago

80% of companies are spending more time, and 70% are spending more money on ‘Health & Safety’ compliance. The main reason appears to be an increase in management awareness (in 70% of cases), as opposed to an increase in regulation. What we don’t know is what they are being advised, and what they are spending time and money on. It would be interesting to know.