16 August 2011

Safety at all costs

Manufacturers in breach of health and safety laws could face paying for HSE inspections. Billed as 'cost recovery', it's one of the more controversial proposals from the regulator. Max Gosney asks HSE chair Judith Hackitt to explain

As a former operations director at a pigments manufacturer, Judith Hackitt is no stranger to colourful language. However there's one F-word the HSE chair just won't tolerate. "It is not a fine," she says of cost recovery, the most controversial of a series of health and safety changes set to hit UK manufacturing.

"It's not a penalty," she adds of the mechanism, due to launch next April, which could see manufacturers billed for inspections where they flout HSE recommendations. "It's about us recovering the costs of the work we put in to get that business to comply with the law."

However, critics have condemned cost recovery as a cynical surcharge from an organisation facing severe spending cuts. Hackitt refutes the accusation. "The cost recovery work we are planning is associated with those who are found to be at fault," she says. "Overall our philosophy is that those who are trying to do the right thing should get our help and support. Those who are wittingly or unwittingly flouting the law are the ones who we think should cease to have a competitive advantage by failing to do that."

It's a robust argument. Yet concerns remain over the way cost recovery will be policed. Site managers could be forgiven for having sleepless nights over the thought of HSE being given free rein to determine who pays and how much. Hackitt is quick to reassure that cost recovery won't be decided by diktat. "It isn't cast in stone. We're working on the details of the proposal right now. This is something that must be subject to consultation."

What Hackitt can reveal is that the mechanism will be enforced when a "material fault" is uncovered and requires HSE intervention following an inspection. That initial inspection will be triggered by an accident or complaint, she says. The amount charged to manufacturers will be based on the total costs of the repeat inspection, Hackitt adds.

"We're not seeking to make money out of this, but it will be the full cost of the inspector plus the back office support staff." An HSE inspector's time is valued at "£100-£200 per hour", she says. There will be an appeals system, but again the details are as yet undefined. "I'm very much aware of the risk of people seeing this as the speed camera equivalent for HSE. That's not the intention," says Hackitt.

Those refusing to meet HSE's costs can expect a tough ride, according to Hackitt. "It's a bit like asking 'what do consultants do when the business doesn't pay their bill?' They take them to the small claims court, presumably." The difference, though, centres on consent. A company which hires a third party and then refuses to pay is quite distinct from one billed for an arbitrary service. "Yes, but it isn't a fine," Hackitt retorts. "It's really important we get right away from people seeing this as a penalty or a fine – it is a cost recovery mechanism."

The emphasis on cost control is understandable for an organisation facing a 35% budget cut within three years. Such severe cutbacks have forced the HSE to pull the purse strings, with cost recovery just one area of potential saving. Another is a drastic reduction in proactive site inspections. These will be slashed by a
third from 33,000 to 22,000 a year. However, the cutbacks won't lead to lower risk factories being forgotten, Hackitt stresses. "Is the cup half full or half empty? There will still be over 20,000 proactive inspections a year, so they will still happen. There are also other ways of interacting with sectors."

The alternatives could include a free advisory site visit by HSE – a programme called Estates Excellence is being trialled in the South East. "We don't rule out doing visits to manufacturing sites, particularly if people ask us to come in." The policy is symbolic of an organisation determined to reward the good and punish the bad says
Hackitt. "Supporting and enabling those who want to do the right thing; tough on those who try to avoid doing the right thing," she says of the HSE's regulatory style.

But it's the bad cop side of the routine that lingers. HSE is caricatured as a killjoy, banning innocuous activities like village fetes over fears the sawdust in the lucky dip might cause emphysema. The criticism is rooted in misunderstanding, says Hackitt. "One thing we find is there are pieces of legislation people perceive to be health and safety that are actually something else like employment law or fire regs. The second thing is requirements placed by insurers."

Hackitt cites the Woolf list as an example of insurance companies leading health and safety astray. The list is an HSErecommended itinerary of documents that employers could keep to help defend against a compensation claim from an employee. "It was suggested as a range of documents you might want to keep," says Hackitt. "Now, over time without any involvement from us, that list has become mandatory. The insurers will say 'have you got all these documents or we might have difficulty fighting the claim'."

The Lord Young report looks set to restore order. The study, commissioned by David Cameron, has recommended capping the cost of claims, a clampdown on no-win no-fee advertising and less bureaucracy in low risk workplaces. The reforms will now be led by MP Chris Grayling under the 'Good Health and Safety, Good for Everyone' programme.

"I've been saying ever since I've been in this job that we have to make a difference in people's minds between real health and safety and all this other nonsense and bureaucracy," says Hackitt.

Break the stranglehold of litigation and red tape, and we will uncover a health and safety system to envy, she adds: "We talk about all the burdens but what we ought to talk about is how good we are. Everyone who is part of the system has turned this country into a world-leading health and safety performer." And that can only be
complementary for manufacturers looking to gain a global competitive edge. "It would be hard to stand up and say you were running a quality, high-performance manufacturing business if you didn't have health and safety at the heart of it," she says. "What we need more than anything else right now is a few more leaders who
will stand up and say health and safety isn't difficult, because it isn't."

Opponents could accuse Hackitt of idealism. Rival manufacturers in India, France or Brazil capitalise on lower compliance costs with less extensive health and safety demands. If you agree with the dissenters, then the HSE chair has a message: "I'd be really interested to know which bits of health and safety legislation get in your readers' way," she says. "From July, they will have every opportunity to tell not just us but also the government what those regulations are that they think are getting in their way, because it will be health and safety's turn in the spotlight under the Red Tape Challenge." Over to you.

1. Cost recovery
Manufacturers found in material breach of health and safety law will be charged for the expense of inspections. An example is the discovery of inadequate machine guarding. The bill includes the cost of the HSE inspectorate and back office staff time. A consultation has been launched and manufacturers can give their views at www.hse.gov.uk. Regional trials are due this autumn with full rollout next April. HSE already operates cost recovery in certain high-risk sectors.

2. Cut in frontline inspections
HSE will cut proactive inspections by a third as it reacts to a 35% budget cut by 2015. Visits will focus on higher risk sectors. Lower risk areas could be able to request informal advisory visits.

3. Less red tape and simpler procedures
The Lord Young report has fuelled a witch hunt on unnecessary admin linked with health and safety. HSE has launched a bid to simplify guidance for SME businesses. The regulator has published 'health and safety made simple', an online reference guide. Health and safety is also under the spotlight of the government's Red Tape Challenge with manufacturers invited to name the most spurious parts of regulations.

4. RIDDOR relaxed
Manufacturers will only have to report employee absences from industrial diseases and dangerous occurrences when workers are off for seven days rather than the existing three. The proposals are subject to consultation.

Hackitt in the hot seat
Armed with remarks left by factory managers to our own health and safety survey, WM puts your frustrations to the HSE chair:

WM reader: "The balance and responsibility between employer and employee on health and safety is not correct. Employees should be taking more
responsibility for their actions while in the workplace to help protect themselves and others. It's always easy to blame the employer for every accident that happens."

JH: "You have to start with what it says in the Health and Safety at Work Act: every employee has a duty to act in a way that doesn't put themselves or their co workers at risk.

"Prosecution by us I understand is something lots of people fear, but we don't prosecute in the case of every accident. We only prosecute where there's clear evidence of a breach of the law. In a civil claim, even if we do not prosecute, every employee will be able to take out a claim against the company under their employers' liability insurance. Under civil law there is a strict liability there even if there has been no breach of the law.

"Having said that, are some of those claims employees make jusified? Yes they are. But does that system need to be sharpened up? Has it become perhaps too easy to settle? I suspect there may be some of that."

WM reader: "I'm concerned that incidents are not always investigated in an open way by the HSE but more to apportion blame as far as possible to employers which can leave the full cause unreported and leave it open for future reoccurrence."

JH: "I would find that very hard to believe. The first part is correct: not all accidents are investigated. We have in any given year 150-200 fatalities in the UK and over 100,000 injuries and we don't investigate all of them. We have certain criteria.

"Not all accidents investigated to find the root cause? I don't accept that. The whole purpose of the investigation – and this is hugely important to your readers – is to find out the cause and to spread whatever learning comes out of that so it doesn't happen again. That's more important than the prosecution."

What aspects of health and safety hinder your site's activities? Tell WM and we'll pass your views on to the Red Tape Challenge, which aims to cut onerous regulatory burdens on businesses. Email: mgosney@findlay.co.uk

Max Gosney

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