Select Committee on Work and Pensions Written Evidence

Supplementary memorandum from DWP, November 2007

1.   Further analysis of HSE's performance against the PSA targets and in particular on increase in incidence of ill health and workplace health-related days lost in 2006-07

  The ill health estimates are derived from the Labour Force Survey (LFS). Because of the uncertainties, mainly due to sampling variation comparing any single year's estimate with another can be misleading. Trends provide a sounder basis for developing policy and so the proper conclusion is that we won't know what is really happening until we have at least another couple of years' estimates. Although the proportional increase in incidence rate is striking, it represents a relatively small proportion of the workforce: between the two most recent years just one additional worker in 200 reported a work-related illness.

  Although we can drill down below the national level, estimates become increasingly uncertain because they are based on fewer survey respondents. Notwithstanding this caveat, the change between 2005-06 and 2006-07 does vary between employment sectors. The increase is particularly strong in the public sector, with mixed patterns seen in other sectors.

  Five broad sectors show results for 2006-07 out of line with their trends for the four preceding years:

    —  manufacturing;

    —  real estate, renting or business activities;

    —  public administration and defence;

    —  education; and

    —  health and social work.

  In each case the 2006-07 figure is higher than would be expected on earlier trends, which were level for "health and social work" and falling for the other four sectors. The reversal is particularly marked for "education" and "public administration and defence". These five sectors drive the overall pattern.

  "Construction", "transport, storage and communication" and "financial intermediation" all show results consistent with continuing downward trends. "Wholesale and retail trades" and "hotels and restaurants" show little change.

  The rise is strongest among public sector workers (40% increase compared to 20% in other sectors) and mostly composed of cases of MSD and stress.

  We are planning further analyses of the LFS and other data sources to help develop a balanced interpretation of the available evidence. We will be comparing the answers of respondents who featured in both surveys (2005-06 and 2006-07) to see what might have changed their reported work-related illness state. Findings for this work should be available in the first few months of 2008.

  A further contribution to our understanding should come from other studies, eg the civil service survey due out before Christmas, the NHS staff survey due in May and analysis of the Fit3 employee survey next summer. These will give a mix of figures on absence and employee views on ill health at work for 2006 and 2007, and thus will build, with the LFS, a more robust picture on ill health in the latest years.

  HSE needs to continue focusing on stress and MSDs. We have work planned for 2008-09 that will build on existing health programmes. In particular HSE will:

    —  Continue to promote the better management of health at work in the public sector with a particular focus on sound management practice eg use of the stress management standards.

    —  Continue work in sectors with high risks of musculoskeletal disorders (manufacturing, construction and services) and new work to tackle upper limb disorders.

    —  Promote further "partnership" type work:

    i)   with sector based organisations like the EEF which has achieved results for the manufacturing industry through a sustained business to business campaign around absence using top quality support materials, and

    ii)  supporting cross Government initiatives eg the Health, Work and Wellbeing Strategy and actions by the Civil Service Steering Board and Ministerial Task Force on Health, Safety and Productivity.

HSC/E's work with the General Medical Council (GMC) and general practitioners

  The GMC has a role in ensuring proper medical education and medical schools increasingly are including occupational health in the undergraduate curriculum. The GMC does not have a remit in respect of sickness certification unless a doctor's performance in this respect is a cause of concern. DWP is currently piloting a range of initiatives designed to increase GP knowledge and capability in the area of occupational health including training for both undergraduates and practising GPs.

  Previous experience of involving clinicians in the UK in formally recording work-relatedness of illnesses they diagnose has not been encouraging. At one stage doctors certifying death were able to record possible work-relatedness on the death certificate but this opportunity was infrequently taken. In contrast doctors in many Scandinavian countries have a statutory duty to report work-relatedness of ill health.

  HSE sponsors a scheme, run by the University of Manchester, to gather information from selected GPs about work-related ill health and absence among their patients. The GPs involved all have some training in occupational health. The scheme has only been running for 12 months and so is too young to give a clear indication on trends in work-related ill health. By the time next year's data are published we will be able to make a first comparison between changes in GP-attributed work-related illness and the LFS measure. In due course the scheme will provide an alternative, and similarly comprehensive, picture of trends in work-related illness to the LFS.

2.   Additional data on prosecutions (2005-06 and 2006-07) including number where a conviction secured, number of those convictions where costs recovered and quantum of costs recovered

  HSE's longstanding policy is to claim the full costs it reasonably incurs in carrying out an investigation and bringing a subsequent prosecution in England and Wales. This is a policy that has been supported by the courts (R v Associated Octel Ltd (Costs) and R v F Howe and Sons (Engineers) Ltd). Costs cannot be claimed by HSE in the Scottish Courts where it is the Procurator Fiscal who brings prosecutions following investigation by HSE.

  The table below shows HSE's prosecutions and associated costs in England and Wales for 2005-06 and 2006-07.

Offences prosecuted ConvictionsCosts claimed by HSE Costs awarded by the courtsProportion of costs awarded compared to costs claimed
2006-0711,0462 7862£6,862,0483 £6,209,426390%
2005-06935775 £3,252,0854£3,092,1024 95%

1  Includes offences related to railways. These were initiated by HSE, although this industry is now regulated enforced by the Office of Rail Regulation

2  Provisional data published in 2006-07 HSC Health & Safety Statistics

3  All prosecutions on HSE's operational database (COIN) with a hearing date from 1-4-2006 to 31-03-2007

4  All prosecutions on HSE's operational database (COIN) with a hearing date from 1-4-2005 to 31-03-2006

  It is not uncommon for an award of costs to be less than the total amount applied for. This is because the court will take other factors into account, such as the size of the penalty awarded, any awards for compensation, and the defendant's ability to pay.

  Of costs awarded by the courts the vast majority are paid in full; a 2007 internal audit of a sample of Field Operations prosecution costs and their recovery found 98% of the total amount awarded was actually received.

3.   Progress report on the Secretary of State's Construction Forum : Progress of the "Framework for Action"

  The Strategic Forum for construction agreed that its Health and Safety Task Group would coordinate the development and implementation of the "Framework for Action". The Task Group, chaired by John Spanswick of Bovis LendLease, also a Health and Safety Commissioner, has met and made progress on a number of issues. Three sub groups of the Task group—all with HSE representation—have been set up to take forward the work on key themes. The Task Group will provide an initial report on progress to the Government early in the New Year.

4.   Further information on the Regulatory Impact Assessment produced by HSE concerning the impact of new legal duties in directors

  The Regulatory Impact Assessment (RIA) prepared by HSE was produced in line with guidelines in the Treasury's Green Book.

  The RIA considered the impact of three options:

    —  Option A: Do nothing—leave HSE policies and practices unchanged;

    —  Option B: Legislation and guidance—create new legislation backed up by clear and credible guidance; and

    —  Option C: Guidance alone—new clear and credible guidance.

  Using Treasury guidelines, HSE's economists used a combination of data based on HSE's standard assumptions for RIAs (eg the costs of workplace injuries), and assumptions specifically related to the issue of directors' duties (eg the number of organisations currently directing health and safety at Board/top level).

  The draft RIA was tested with a range of stakeholders at an event in April 2006. This led HSE to make a number of changes to the assumptions to reflect the views that were expressed.

  The main assumptions in the final RIA are as follows:

    —  Some 70% of organisations currently direct health and safety at Board/top level.

    —  Under Option B, this would increase from 70% to 75%—original proposed increase to 85% was reduced in light of stakeholder consultation.

    —  Under option C, this would increase from 70% to between 72% and 73% —original proposed increase to 75% was reduced in light of stakeholder consultation.

    —  Director leadership would lead to a 5-10% reduction in accidents and ill health in those organisations that change their behaviour—reduced from 5-25% in light of stakeholder consultation. In general, when assessing health and safety interventions, a 25% reduction is used to indicate an intervention with a "high" level of impact. However, stakeholders advised that this figure was unlikely to be replicated in the majority of organisations—hence the reduction to 5-10%.

  UCATT's report "the Case against voluntary guidance and in favour of a change in the law to impose safety duties on directors" questioned why the RIA used a figure of 70% to represent the number of organisations where health and safety is directed at board level. It suggested that 44% should have been used instead. This figure comes from HSE research published in 2006—a major evaluation of HSC's Enforcement Policy Statement.

  The two figures were derived from two different questions. The 70% figure was based on a question to large organisations about whether health and safety was directed at board level; the 44% figure was based on a question to organisations of all sizes (including sole traders, micro and small firms) about whether they had a health and safety director. The figure of 44% does not therefore give an accurate picture of the number of organisations of all sizes that direct health and safety at Board/top level: in addition those organisations (44%) that have a health and safety director, there will be numbers of sole traders, micro and small firms that give top level attention to health and safety; and there will be numbers of larger organisations that direct health and safety at Board level without having appointed a specific director for health and safety.

  In calculating the RIA HSE's economists excluded sole traders. However, because there was no evidence on how many micro and small firms have boards, all other categories of employers were included, which is their standard practice for such situations. The figure of 70% was thus applied to all these organisations, in the absence of evidence of whether smaller firms are more or less likely to direct health and safety at Board/top level.

  The discrepancy between the figures of 44% and 70% was a matter of concern in the UCATT report, but the advice of HSE's economists is that the broad findings of the RIA are not significantly sensitive to changes in this percentage. In the case of options B and C, whichever figure is used the costs always outweigh the benefits, and the costs of option B (legislation) are always greater than the costs of option C.

  The RIA analysis was only one factor in a wider decision making process. In reaching their decision in May 2006, the HSC also considered other factors:

    —  the increasing number of organisations that direct health and safety at board level, following the original publication of the 2001 directors' guidance;

    —  emerging legislative developments in company law, corporate manslaughter and alternative penalties;

    —  results of stakeholder engagement that suggested benefits would follow clearer guidelines to inspectors on enforcement and new clearer and stronger guidance for directors; and

    —  plans to formally evaluate the impact of such guidance.

  Taking all factors into account, the HSC decided to authorise the issue of clearer guidelines to inspectors on enforcement; and the publication of new, clear and stronger guidance for directors. They concluded that they could not at this stage recommend legislation, but agreed to return to the issue in the light of the above developments.

5.   Data detailing the average cost of a workplace inspection and the average cost of a workplace injury

  Outside the major hazard industries,[70] HSE carries out workplace inspections in a wide range of organisations of differing scale and complexity. In 2006-07 the average cost of such inspections carried out by HSE's Field Operations Directorate was about £600. This cost includes staff costs and an estimated attribution of overheads.

  A comparison of the costs of an inspection with the cost of an injury would not be meaningful. Though HSE are confident that inspection has a positive effect on reducing the probability of future injury, we are unable to quantify this relationship precisely.

  Workplace injuries lead to costs to individuals, businesses, the exchequer and society. HSE's estimates of the average cost of workplace injuries to society are published as the HSE "economic appraisal values".[71] These provide estimates of average unit costs in the following four categories, defined according to the duration of the consequent absence from work:

    —  Fatal Injury.

    —  Major Injury (leading to an absence from work of greater than three months).

    —  Other Reportable Injury (leading to an absence from work of over three days).

    —  Minor Injury (leading to an absence from work of less than three days).

  The average unit cost to society, for each of the above four categories of workplace injuries, consists of the following components:

    —  Human costs: this is based on individuals' subjective valuation of the loss of enjoyment of life (beyond the consumption of goods and services), and the pain, grief and suffering to relatives/friends.

    —  Cost of lost output: this is assumed to be equal to the wage cost that is normally incurred in employing a replacement worker.

    —  Resource costs: this includes costs to DWP of administering benefits payments, NHS medical costs, and employers' recruitment costs. DWP welfare payments are classed as transfer payments (from the exchequer to individuals), and are therefore not included in the estimated costs to society.

  Table 1 shows the estimated average unit costs to society for each of the four categories of injuries, based on 2005 (Quarter 3) data.

Average Unit Costs to Society of Workplace Injuries (2005, Q3)

Category of InjuryAverage Unit Cost to Society
Major Injury£38,500
Other Reportable Injury£5,500
Minor Injury£350


November 2007

70   Includes nuclear, onshore major hazards (petrochemicals, chemicals, gas storage), offshore oil and gas extraction Back

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