DWP 14th June 2013
A review of the health and safety executive as a non-departmental public body
HSE annual budget is ~£3oom. That is roughly equivalent to 20% of the EL insurance premium collected in the same operational area. HSE have contact with 60% of employers every 3 years, insurers have contact with 85% of employers every year (15% don’t buy EL even when they should, HSE and local authorities are not always great at compliance).
HSE claim to have saved the UK from unnecessary costs that would have followed from EC Directives had they not been intercepted. This, political work in addition to its main activities, which are:
• Lead others to improve health and safety in the workplace;
• Provide an effective regulatory framework;
• Secure compliance with the law; and,
• Reduce the likelihood of low frequency, high-impact catastrophic incidents.
The latter two would seem, in part, to require a non-commercial solution which is independent of political influence and other forms of bias. However, duty of care standards and an appropriate body of law could and should be provided by the courts. This is a common law country.
Insurers would have a direct interest in propagating, and assessing compliance with, duty of care standards that meet with public policy aims as produced by the courts. With an additional say £200m a year devoted to this, insurers could do at least as well as HSE.
With the Enterprise Act going through, there would be no need for both statutory and common law duty of care standards. In fact, having both could be positively uneconomic.
The problem would be in ensuring that insurers’ interests are aligned with those of policy-makers in government. Insurance would naturally focus most of its attention on cost effective interventions but these costs would be compensation costs, not national productivity ones.
The national productivity effect of HSE has not been established (well, at least not published). The national productivity effect of a new insurance-based system has not been established, but lessons could be learned from other nations where this is the norm.
That just leaves political sympathy as the deciding factor in this consultation exercise: Do we need HSE?