“Raising Standards, Saving Lives ”

1. The business case for health and safety – gathering the evidence Neal StoneDirector, Policy & Communications, British Safety CouncilLondon Health and Safety Group, 17 September 2012 “Raising Standards, Saving Lives”

4. Taking stock of our health and safety performancehttp://www.hse.gov.uk/statistics/index.htm • Picture showing considerable improvement over last ten years: • both the incident rate for major injuries and over 3 day injuries have fallen over last three years – over 3 day injury rate by some 13% • rate of reportable injury has fallen over last three years • 173 workplace fatal injuries in 2011/12 down from 175 in 2010/11 – lower than the five year trend of 196 workplace fatalities • days lost per worker due to work related ill health and injury down from 1.76 in 2000/02 to 1.23 in 2009/10

5. So what does this mean in terms of economics? Statistics from HSE for 2010/11 • 1.2 million working people were suffering from a work-related illness • 26.4 million working days lost due to work-related illness and workplace injury (excl. cancers) – down from 28.5 million in 2009/10 (or 1.2 days per worker) • = Work-related ill health and injury costing Britain £14 billion a year • Looking at 2009/10 figures, “somewhat over half of the total cost fell on individuals whilst the remainder was shared between employers and government.” British Safety Council, May 2012 Presentation to ENA SHE 2012 conference .

6. Enforcement of health and safetyhttp://www.hse.gov.uk/statistics/overall/hssh1011.pdf • Enforcement action carried out by HSE, local authorities in 2009/10 • 885 offences were instituted by HSE • 283 offences were instituted by local authorities • 15,837 enforcement notices were issued by all enforcing authorities. • Enforcement action carried out by HSE, local authorities in 2010/11 • 912 offences were instituted by HSE • 294 offences were instituted by local authorities • 18,290 enforcement notices were issued by all enforcing authorities

7. Penalties for health and safety offences – a snapshot of significant sanctions Jan – Jun 2006/12 “Raising Standards, Saving Lives”

8. HSE’s Fee For Intervention (FFI)www.hse.gov.uk/pubns/hse47.htm • HSE in promoting FFI argues that it: • shifts the balance in favour of those doing the right thing; provide an incentive to operate within the law • recognises need for clear mutual expectations of how the scheme will work and provide confidence that it will be implemented fairly • HSE intends to publish a review after FFI’s first year, and will make the nature, number and outcome of the appeals transparent • How many inspections needed to generate estimated £43million of additional receipts FFI to bring in

9. Costs of occupational accidents and ill-health – from European Agency research (2004)

10. What evidence is there on compliance costs? Earlier research • Entec study (2002) found that: • Medium and large companies expend most on training; small on training and PPE • Larger organisations believe benefits outweigh costs (may be related to SMEs having less experience of accidents; also less likely to have performance measures and targets in place) • See www.hse.gov.uk/research/rrpdf/rr174.pdf • Organisations responded to ELCI cost pressures: • Primarily by trying to improve health and safety, • Also, to lesser extents, reducing operating costs, contesting claims and switching insurers.

11. What evidence is there on compliance costs?www.hse.gov.uk/research/crr_pdf/2002/crr02436.pdf • Wright et al (2005) in research for HSE, Changing business behaviour, found that the list of key motivational factors remains largely unchanged from previous research, namely: • enforcement/regulation, reputational risk, the moral case, avoiding cost of accidents and business incentives • organisational approach is also influenced by size and sector • However notable that: • The financial incentive provided by insurance premiums had grown • The fear of enforcement is intertwined with the fear of reputational damage as well as business disruption • There was also evidence that the moral case remains a driver • It was also clear that understanding and awareness remain key precursors

12. What evidence is there on compliance costs? • More recently a PriceWaterhouseCooper’s study demonstrated a return on investment of £4.17 for every £1 when following the delivery of workplace wellbeing programmes. It is clear however that failure to address ill health results in significant costs to business. • CBI quote that on average ill health costs each business £600 per employee per year. • Long term absence contributes to up to 75% of absence costs (CIPD) demonstrating the value of early intervention in cases of ill health. • MPs have recently quoted the value of legislation in the UK in terms of h&s for every £1 there is a £1.38 return on investment.

13. Recognition of factors influencing compliance • Not all businesses are the same – low risk vs. high risk • Ensuring clarity of regulations and requirements for business to ensure that there is not over-compliance • Sensible and proportionate management of risk – matter of understanding risk and debunking myths around health & safety • Learning lessons - Flixborough, Bhopal, Piper Alpha, Buncefield and Texas City - evidence that lack of injuries and near misses is no guide whatsoever that all is well in process safety terms. Need to balance short-term business pressures.

14. Support for good health and safety • British Chamber of Commerce, May 2011: • “The BCC supports good health and safety regulation. The UK has a good record on health and safety and it is essential that it is maintained. There is no doubt that sensible rules are needed to prevent serious accidents.” • However BCC in September 2012 said, • "While the Red Tape Challenge has delivered some welcome changes, the overall number of regulations on the books remains far too high. The extent to which businesses actually benefit will depend on whether the regulations affected are the most burdensome ones or just arcane rules that are no longer applied. We will measure the government's success by the reduction in businesses costs, which means that employers will expect come genuinely burdensome regulations to be scrapped." 

15. Cost benefit of recent and planned reforms – the burden of regulation? • RIDDOR – change from three to seven day reporting – 75,000 fewer reports - annual net saving £240k – just over £3 per report • Fourteen sets of legislation – including revocation of Notification of Tower Crane Regs – annual net saving of £55k – scrapping 1450 registrations annually • ACOP review – no regulatory impact assessment for the proposals currently being consulted on • Self-employed – preferred option would take 865,000 out of scope – saving of £201k per annum – saving of just over £4 per self-employed • Further RIDDOR reform – reduction of reporting requirements – 70,000 fewer reports submitted under proposed change – an estimated annual saving of £1.8million - £40 per report

16. What evidence is there on non-compliance costs? from HSE’s Cost to Britain of injuries and ill-health, 2009/10

17. What evidence is there on non-compliance costs?from HSE’s Cost to Britain of injuries and ill-health, 2009/10

18. What evidence is there on non-compliance costs? from HSE’s Cost to Britain of injuries and ill-health, 2009/10 • Costs arising from benefits payments, reduction in tax and national insurance receipts) • Health and rehabilitation costs • Administration and legal costs • http://www.hse.gov.uk/statistics/pdf/cost-to-britain.pdf

19. Neal StoneDirector of Policy & Communications British Safety Councile-mail neal.stone@britsafe.orgtwitter @nealleonstone