Memorandum submitted by the Federation
of Small Businesses
1.1 The Federation of Small Businesses (FSB)
is the UK's leading non-party political lobbying group for small
businesses existing to promote and protect the interests of all
who own and/or manage their own business. With over 210,000 members,
the FSB is also the largest organisation representing small and
medium sized businesses in the UK.
1.2 The FSB welcomes the opportunity to
respond to this Select Committee inquiry into the Health and Safety
Commission (HSC) and Executive (HSE). Our response will focus
on the views of small businesses towards the HSC/E and health
and safety legislation, incorporating information from our report
into Occupational Health and Safety in small businesses in 2007,
entitled Whatever happened to common sense? and a report
on health and sickness absence issues in small businesses entitled
Health Matters: a small business perspective, published
in 2006. (Both publications are available to download in full
from the FSB website at www.fsb.org.uk/policy).
2.1 The legislative framework
UK health and safety legislation
is not drafted with small and micro businesses in mind which means
that legislation impacts in a disproportionate way. The current
legislative framework is sufficient; no further regulation is
needed but a better application of existing regulations and more
useful and accessible guidance for businesses made available.
A specific "positive"
duty on employers in the field of health and safety is not necessary
and would only create increased bureaucracy for small businesses
and encourage risk averse behaviour.
2.2 Inspections, enforcement and prosecutions
The FSB has concerns that the
HSE does not have enough front line inspectors in order to police
the health and safety regime effectively. Small businesses are
competing with rogue employers who are not investing in adequate
health and safety systems.
Inspectors need more effective
training on how to deal with small businesses including an appreciation
of how they operate, particularly in specialised industries with
particular working methods and safety procedures.
3.2 Occupational health
The HSE should seek a replacement
for the Workplace Health Connect pilot scheme from which funding
has been removed. Important lessons should be learnt from the
scheme about how to advise small businesses on health and sickness
absence issues and which mechanisms of communication are most
Businesses need more accessible
and cost-effective advice on occupational health and return to
work and greater clarity around their rights and responsibilities
in managing the return to work process, in order to improve absence
3. THE LEGISLATIVE
3.1 Is the health and safety burden on businesses
3.1.1 The FSB's 2007 report on occupational
health and safety in small businesses illustrates that businesses
have concerns about the way in which H&S legislation plays
out in small businesses and the burdens it subsequently creates.
Many small businesses believe that the current health and safety
regime is not proportionate. The issue is that many businesses
lack tailored advice on how to implement appropriate and proportionate
health and safety systems within their business. The FSB is by
no means advocating deregulation or the reduction of health and
safety standards in any way. We are only too aware of the benefits
that good H&S practices can bring to a business in the form
of increased productivity and the enhanced wellbeing of staff.
Businesses can benefit from establishing good health and safety
systems in the long run but the onus should be on encouraging
businesses to implement systems that are appropriate to the size
and make up of that individual business.
3.1.2 The concern of businesses, and as
our 2007 report highlights, is that common sense is often absent
in the current health and safety regime. The overwhelming response
from businesses (particularly characterised by the micro business
sector ie with one to nine employees) is that they find administrative
burdens to be more bureaucratic than compared to five years ago.
Although the enacting of legislation in this area has begun to
level off over recent years many businesses are still getting
to grips with the basics, for example, in the form of risk assessments.
3.1.3 Our 2007 survey asked businesses how
they found compliance with a list of health and safety requirements
including; writing a H&S policy, providing information to
HSE/regulators, keeping up to date with new regulations, record
keeping, gaining and recording compliance and monitoring and reviewing
health and safety systems. 39% of businesses found all of the
requirements "quite difficult" to deal with and 21%
that they were "very difficult" to deal with.
3.1.4 Businesses also expressed mixed feelings
around the risk assessment process. 32% of members found it straightforward
to carry out, but 39% finding it "quite difficult" or
even very difficult (21%) to deal with. It is also clear that
businesses have particular difficulties in keeping up to speed
with new regulations that come into force which is cited as a
"very difficult" (40%) or "quite difficult"
issue to deal with.
3.1.5 The 2007 FSB survey also asked businesses
about the administrative requirements from a list of current health
and safety legislation. Where businesses found the legislation
relevant to their business, the Management of Health and Safety
at Work Regulations and the Health and Safety at Work Act in particular
came out as being "very" (60%) or "quite burdensome"
(46%). This is not a surprising response given that the majority
of calls to the FSB's 24-hour legal advice line are from businesses
asking for help with drawing up a health and safety policy and
practical advice on carrying out risk assessments. A number of
regulations including; Manual Handling Operations, Lifting Operations
and Lifting Equipment, Control of Hazardous Substances to Health
and the Consultation of Employees Regulations also tended towards
the "quite burdensome" bracket.
3.1.6 A number of businesses stated that
the current health and safety regime specifically acts as a deterrent
to them employing more staff. This is hugely concerning for the
FSB given that small businesses make up over half of UK GDP and
constitute over 50% of new jobs created in existing companies
in the UK and 85% of new jobs created in new businesses. Our conclusion
is that the current legislative framework is sufficient; no further
regulation is needed but a better application of existing regulations
and more useful and accessible guidance for businesses along with
relevant website information.
The Government should ensure
that it takes small and micro businesses into account during the
legislative process and tailors health and safety legislation
and associated guidance to their situation.
The Regulatory Impact Assessment
(RIA) process for any new legislation should be a robust one which
specifically analyses and quantifies the potential impact and
costs of new legislation on small businesses.
Guidance should be straightforward,
jargon free and available from a central, well advertised and
easily accessible source. Businesses welcome online templates
such as risk assessments which can be used as a starting point
and tailored to their own needs.
3.2 Are EU Directives interpreted and translated
by HSC into UK law appropriately?
3.2.1 In September 2006, the FSB published
Burdened by Brussels or the UK? Improving the implementation
of EU Directives based on a survey of businesses into the "gold-plating"
of EU directives. Businesses were asked about their views on the
implementation of a number of regulations including the Work at
Height Regulations 2005 and the Control of Asbestos at Work Regulations
2002. The report shows some evidence of gold plating but also
the fact that unclear transcription of Directives into UK law
can cause confusion and difficulties for businesses.
3.2.2 In the case of the Working from Height
Regulations, the findings showed that a significant majority of
businesses questioned felt the need to go beyond the scope of
the regulations in order to protect themselves legally against
every eventuality. For example, the original directive states
that only working platforms that could cause a fall from a height
of more than two metres need to be inspected. Despite this, 65%
of all affected businesses feel the need to assess all work equipment.
This highlights the high level of risk aversion felt by small
businesses in the face of possible legal challenge. 28% of businesses
also said that the requirement to carry out continual risk-based
assessments on all equipment and document the findings had a significant
impact on their business. Businesses also tend to keep documents
longer than the three months after a construction project has
finished, in order to protect themselves legally. 28% also said
that they had at some stage hired an external consultant to assist
with risk assessments under the legislation, which adds to costs
3.2.3 As far as the Control of Asbestos
at Work Regulations 2002 are concerned, 22% of businesses said
that the regulations were very difficult to understand and, as
a result, difficult to comply with. Businesses find this legislation
difficult to understand and therefore are often obliged to seek
help from a consultant. We are concerned that businesses do this
because of a lack of adequate and straightforward tailored advice.
3.2.4 These figures demonstrate that as
a result of the way in which the Working at Height and Asbestos
Regulations were transposed and the associated guidance drafted
left businesses with doubts as to how to implement the legislation.
This all leads to businesses resorting to the help of a consultant
(sometimes when this is not really necessary) and taking a risk
averse approach which adds to their burdens and costs. More effective,
straightforward legislation and guidance would seek to improve
3.3 Are businesses given appropriate guidance
by HSE on their obligations under health and safety law?
3.3.1 The FSB's experience is that that
HSE is making progress in terms of the appropriateness of the
guidance it provides for small businesses ie simple to understand,
straightforward and accessible. The FSB is pleased that the HSE
in some areas makes good use of the Small Business Trade Association
Forum in order to get feedback on draft guidance to make sure
that it is as suitable for its target audience as possible. The
issue with guidance is that in order to be straightforward it
is often too generic for individual businesses and does not give
them enough information specific to their individual business
or sector. The growing number of businesses, particularly micro
businesses, working from home-based premises are concerned too
that guidance is not taking their circumstances into account.
The FSB is pleased with the recent risk assessment templates developed
by the HSE for individual business sectors which gives a more
tailored steer to businesses as to how they need to approach the
risk assessment process.
3.3.2 Results from our 2007 health and safety
survey show us that businesses are concerned that not enough straightforward
advice is available in both paper and downloadable format. The
FSB appreciates that a good deal of advice is out there, authored
by different organisations, but that official advice needs to
be more effectively targeted to the businesses and sectors needing
help. More imaginative ways of getting the message out should
be used to communicate with businesses with cross referencing
to other websites such as BusinessLink, Companies House and other
websites accessed by businesses on a regular basis.
3.4 What impact will the Corporate Manslaughter
and Corporate Homicide Act (2007) have on businesses' approach
to occupational health and safety?
3.4.1 In some senses the Corporate Manslaughter
Act and Corporate Homicide Act (2007) will have little impact
on the small business sector given that they are being caught
and prosecuted under existing legislation anyway. The Act will
seek to redress the balance and the issue with previous legislation,
in which it was difficult to identify the `directing mind' in
larger organisations. Greater awareness of the Act may cause small
businesses to think more about their health and safety systems
and implement appropriate systems in the workplace. It is also
possible that the Act will cause some businesses to take a more
risk averse approach because of the fear of prosecution.
3.5 Are director's health and safety duties
appropriately covered by voluntary guidance?
3.5.1 Yes. The FSB believes that Director's
health and safety duties are adequately covered by voluntary guidance.
This has been reinforced recently through guidance developed by
the HSE and Institute of Directors (IoD), with the assistance
of the FSB. The FSB is aware that the HSC has considered the issue
of creating a positive duty on directors in the field of health
and safety. The difficulty with this is that the inevitable consequences
would be additional bureaucracy for small businesses and an increased
tendency to risk aversion in order to protect their business.
Such a duty would also not necessarily help change attitudes and
culture within the workplace. In small businesses the distance
between a manager and employee is very small so there is much
less need for a formal duty to compel business owners to carry
out certain tasks which currently happen informally. The issue
too is that a positive duty would do nothing to secure the compliance
of rogue businesses that are flouting health and safety legislation
anyway and doing nothing to implement safe systems in their business.
3.5.2 HSE could do more to link with Companies
House and websites such as IOSH's www.safestartup.org in order
give advice on directors duties when a business in the processing
of starting up.
4.1 Does the HSE have sufficient resources
to fulfil its objectives as the health and safety regulator and
meet its PSA targets?
Does HSE allocate its budget efficiently?
Are there areas of HSE's operations that require
4.1.1 The FSB is concerned that the HSE
does not have sufficient resources in some areas to fulfil its
objectives and meet its PSA targets. We would like to flag up
two particular issues with regard to the HSE's resources invested
in inspectors and the inspection regime and the Workplace Health
Connect scheme, which are set out in sections 5 and 8 respectively.
5.1 What impact has the reduction in inspection
rates had on standards of occupational health and safety?
5.1.1 The FSB does have concerns that the
HSE does not have enough front line inspectors in order to police
the health and safety regime effectively. Small businesses are
battling against rogue employers who are not investing in health
and safety systems and the situation is therefore not a level
playing field. In the case of the inspectors themselves, there
are concerns around the fact that, the more senior the staff,
the less experience they have in the operational aspects of the
work. We perceive that this affects work on the front line, inspection
targets, how funds are allocated, lack of recruitment and poor
selection of staff ie staff with insufficient real life experience
and experience of the realities of running a business.
5.1.2 We do have concerns that in order
to meet prosecution targets, small businesses can be seen as an
easy target. The FSB 2007 Health and Safety report shows that
three quarters of businesses have not been visited by a Health
and Safety inspector in the last three years. Businesses that
were inspected were twice as likely to be visited by their local
authority (15%) as opposed to the HSE (8%). This is largely due
to the fact that many small businesses in low risk sectors are
visited by the local authority, whereas businesses in higher risk
sectors are more likely to be visited by the HSE.
5.2 Does HSE get the balance right between
prevention and enforcement?
5.2.1 Businesses are split as to whether
or not they view HSE as an advisory or enforcement body. According
to the FSB Lifting the Barriers to Growth in UK small businesses
2006 report, 38% said that they viewed HSE/C as enforcement organisations
and 30% as advisory organisations. It is important that HSE makes
targeted and straightforward advice available to businesses and
carries out enforcement in a targeted way also. Businesses respect
HSE guidance as carrying the `official badge' but can also be
alienated from the organisation when they see inspectors representing
it, acting in a heavy handed way.
5.2.2 Businesses actually have a fairly
positive view of the inspections process. The 2007 H&S survey
asked about the outcomes of the inspections process in their business;
46% said that the inspector gave helpful and practical advice
and 28% that the visit was straightforward with no action for
the business. In one third of cases, businesses were advised of
areas in which improvements could be made and in only 5% of cases
were enforcement notices or prohibition notices served. As far
as the way in which the visit was concerned, 80% of businesses
thought that it was handled fairly, only 8% saying that they thought
the inspectors attitude was unhelpful and 5% felt that they were
treated in a heavy handed way. Some businesses do have frustrations
about what they perceive to be a lack of knowledge from inspectors
particularly in certain sectors. Businesses are frustrated when
inspectors have inadequate knowledge about working methods and
safety systems in certain sectors, particularly in specialist
industries. There is also concern that inspectors could be more
flexible around visiting time particularly in retail premises
for example where businesses may be busy serving customers.
5.2.3 It is important that HSE inspectors
work with businesses to encourage compliance with health and safety.
A heavy handed approach can alienate business and encourage risk
averse behaviour. The onus should be on encouraging businesses
to take a risk-based approach which is appropriate to that particular
organisation and not simply focusing on legal compliance.
HSE and local authority inspectors
need to have more of a "business mind" and appreciate
how small businesses operate, including their financial constraints.
They should offer more flexibility around the timing of visits
and be more open to learning about working methods in specialist
The inspection regime should
be adequately resourced and more effectively targeted so that
it truly focuses on those businesses that are failing to comply.
5.3 Are penalties for health and safety offences
5.3.1 The FSB does have concerns that small
businesses can be an easy target evidenced by the fact that the
majority of successful health and safety prosecutions are brought
are against small businesses. The problem is that fines can have
a dramatic effect on small businesses yet are easily absorbed
by a larger business. Businesses have reported some frustration
around inspectors that do not stick to guidelines from the centre
in terms of penalties and a lack of communication between HSE
and local authority inspection regimes in general.
5.4 How effectively do HSE and local authorities
interact in their inspection roles?
5.4.1 The gap between local authority and
HSE requirements is still a significant issue, with little evidence
of the two organisations working together and/or sharing responsibilities.
This is an area which has been much discussed yet still needs
further attention. The lack of communication between the two bodies
was evidenced recently by sample risk assessments which were prepared
by HSE but not communicated to local authority inspectors who
had no knowledge of them and were not prepared to accept them
as templates. Businesses need more effective advice and support
from a consistent inspections and enforcement regime.
6.1 Is HSE doing enough to tackle the rise
in fatalities in the construction industry?
6.1.1 Around 10% of the FSB's 210,000 membership
are employed in the construction industry. We do recognise that
given current injury rates and fatalities in the industry, there
is further important work to do in engaging with businesses, particularly
those employing casual labour which makes it difficult to train
and educate staff in their situation.
7. MIGRANT WORKERS
7.1 Are migrant workers more at risk of occupational
Does HSE do enough to protect migrant workers
from health and safety risks?
7.1.1 The FSB is aware that migrant workers
are at risk as they do not necessarily have the same standards
of health and safety in their country of origin and therefore
their commitment, knowledge and training in the subject is not
high. There is an important role for employers to work with employees
and HSE to in order to provide guidance in relevant languages.
It is also important that the EU institutions play a key role
in raising standards of awareness and training in health and safety
across the EU.
8.1 What must HSE do to meet its PSA target
for ill health and days lost per worker?
8.1.1 The FSB is disappointed that the HSE
and DWP (Department for Work and Pensions) are sending out mixed
messages with regard to their aim of addressing workplace health
and absence issues. In recent years HSE appeared to be positioning
itself as an organisation concerned with addressing workplace
health issues, particularly considering the launch of the Workplace
Health Connect project in February 2006 (offering free advice
and workplace visits to businesses on workplace health and absence
management). The HSE invested millions in the project with apparently
little or no continuity planning to ensure the continuation of
the service beyond the two year pilot. It is disappointing that
due to HSE budget restrictions the structures, personnel and expertise
gained from the project will be lost after February 2008. Important
lessons need to be learnt from the project with regard to the
sorts of advice and methods of communications that work most effectively
with businesses. The Workplace Health Connect scheme was important
because previous HSE initiatives, such as the stress management
standards, were not tailored towards small businesses.
8.1.2 The FSB Health Matters report shows
that the main reasons for absence in small businesses (apart from
minor illness such as colds and flu and personal reasons) are
back pain (21%) and stress, depression or other mental illness
(11%). Small businesses say that the main barriers preventing
them from providing occupational health and rehabilitation services
for their staff in the workplace are that they have too few staff
to make it worthwhile (57%) (largely due to the large numbers
of businesses with only one to five staff who responded to the
survey). The HSE and DWP needs to encourage alternatives to the
Workplace Health Connect scheme and the development of initiatives
such as NHS Plus. These options give businesses the option of
accessing ad hoc services as and when the need arises. A significant
third of businesses have concerns about costs which also highlights
the need for cost effective and accessible services.
8.1.3 Issues around improving the relationship
between the employer and GP in order to improve absence rates
have very much been in evidence in recent years. 45% of businesses
expressed support for the development of a "fit note"
emphasising what roles an employee is able to fulfil in the workplace,
rather than what they are not capable of doing. Lack of advice
from GPs is particularly in evidence where stress and mental health
issues are concerned with employers needing advice about appropriate
staged return to work. DWP and HSE should give impetus to the
"fit note" project to make this become a reality. In
order to improve the GP/employer relationship 33% businesses were
also in favour of better consultation between the employee, employer
and GP, 16% in favour of more workplace health and rehabilitation
services via GPs surgeries and 15% a named link person in the
local health board to promote and support greater contact between
GPs and employers.
8.2 Does HSE do enough to embed vocational
rehabilitation in the workplace?
8.2.1 Vocational Rehabilitation in the workplace
does not appear to be a priority of the HSE specifically but work
that DWP is taking forward more broadly. The DWP along with the
DoH (Department for Health) are leading the Task Group on Vocational
Rehabilitation which is a positive venture and one with which
the FSB is involved. However, there is an apparent lack of government
support for the proposed Vocational Rehabilitation Council which
stakeholders are trying to promote. Such a Council would seek
to improve standards of service provision within the industry
and guarantee a certain level of service to business owners.
8.2.2 In general, it is apparent that HSE
inspectors need to be better educated about occupational health
issues. There is currently little understanding of contemporary
occupational health issues such as mental health and musculoskeletal
disorders. Inspectors need to be more proactive and supportive
to businesses in this area by providing advice and guidance. Advice
on occupational health to small businesses can often be expensive
and private providers are not always geared up for responding
to the small business and their needs. This is why developing
NHS schemes, and similar initiatives such as Workplace Health
Connect, are so important. Such schemes also need to be effectively
advertised, as our Health Matters report showed, there is currently
very low awareness amongst businesses of the workplace health
and rehabilitation support available to them.
Sickness absence and back-to-work
initiatives should be more effectively advertised and targeted
at small businesses with well signposted links to sources of help.
Information should be more readily available and simple and easy
The Government should communicate
the rights and responsibilities of employers and employees more
effectively where managing return to the workplace is concerned.
Employers are unclear of their role in the process.
Greater impetus should be given
to improving the education of GPs and practice nurses on workplace
health issues to improve the service they offer to businesses.
Workplace advisers in GPs surgeries should be made more widely
available and the plans for a "fit note" developed to
give employers more constructive information about the role that
an employee is capable of fulfilling in the workplace.
Incentives in the form of reduced
Employers Liability Compulsory Insurance (ELCI) premiums in response
for good practice would enable businesses to think more about
putting sound occupational health and safety systems in place.
Federation of Small Businesses