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December 22, 2010

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HSE cuts could work against Government’s welfare ambitions

An influential group of MPs has attacked the Government’s decision to slash the HSE’s budget by 35 per cent by 2014/15, arguing that it is out of synch with the coalition’s aim to get people back into work and off benefits.
The All-Party Parliamentary Group on Occupational Safety and Health has outlined what it believes the spending cuts will mean for the HSE and health and safety generally in a short report.
Describing the cuts as a “false economy”, the Group says any reduction in HSE activities, which it believes is inevitable under the current financial pressures, will lead to increased costs from sickness absence, compensation and benefit payments.
The HSE’s annual budget, including the Health and Safety Laboratory’s research service, amounts to £330m, of which £230m comes from central government. The remaining £100m is raised though charges to industry for high-hazard regulation and scientific research.
October’s Comprehensive Spending Review set the HSE a target to achieve savings of at least 35 per cent by 2014-15, which amounts to about £80-85m. According to the Group, the Government expects the HSE to obtain more of its income from industry, and that the cuts should focus on what Lord Young’s recent report considers “low-risk” businesses.
However, the All-Party Parliamentary Group says it will not be possible for the HSE to maintain its current level of operations with a cut of 35 per cent in government contributions, as charges can only fund regulation and overheads that relate to those charges. It also points out that HSE activity is likely to fall even in industries such as construction, because spending in the nuclear sector and other hazardous industries is likely to increase over this period.
While the Group broadly supports extending charging to all permissioning and licensing activities, and calls for the charges to high-hazard industries to be more consistent, it is concerned that the cost of maintaining the charging regime may lead to most of the income being spent on collection charges.
It is also adamant that the HSE should not go down the route of charging for general inspections, as this would risk undermining the relationship between an employer and the inspectorate. Where the Group believes there is scope for more general charging is in relation to activities that take place as a result of non-compliance – for example, where an inspection leads to enforcement action and, as a result, the inspector must return to the workplace to ensure that the problem has been rectified.
This ‘fee for fault’ approach has support within the HSE, not least from its chair, Judith Hackitt, who recently addressed an audience of safety stakeholders on the subject: “We believe that this approach is fair and equitable and will be welcomed by the vast majority of businesses who are compliant and who see those who take shortcuts as getting away with an unfair competitive advantage.”
The MPs also warn the HSE not to oversimplify the risk-assessment process in relation to small businesses and “low-risk” organisations, such as schools and shops. They say: “Inadequate risk assessments could also give rise to a false sense of security among employers and their workforce. The All-Party Group would be concerned if there were any attempt to reduce the level of intervention and support for these sectors.”
The Group’s warning against over-simplification was echoed by IOSH chief executive, Rob Strange, following the publication of ‘Getting the balance right’, the Institution’s official response document to Lord Young’s review, ‘Common sense, common safety’.
Said Rob: “We welcome the coalition government’s review, and its scrutiny of what David Cameron describes as the ‘damaging compensation culture’ that has over-shadowed genuine health and safety issues over the last few years. For that alone it marks a turning point.
“But we urge the Government not to opt for overly simplistic solutions that compromise standards and leave hard-working people vulnerable. Weaken health and safety, and you risk weakening both public health and the national economy.”
Among its recommendations, IOSH calls for:

  • a rethink of the ‘tick-box’ assessment and checklist regime proposed by Lord Young for “low-hazard” workplaces, and more clarity on the definition of “low-hazard”;
  • more clarity on whether home-workers and the self-employed would enjoy the same standards of protection as other workers, under Lord Young’s proposals; and
  • the introduction of clear professional standards for health and safety advisors operating at different levels – whether they work in-house, or as consultants.

IOSH is also particularly concerned that the peer’s report largely ignores any reference to the health part of ‘health and safety’. It also thinks the Government is missing the chance to encourage “risk thinking” right from the start, by bringing properly coordinated, balanced risk education into schools and into vocational and professional training.

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