10. The HSE was established in 1974 at a time when the majority of employees worked in large manufacturing plants which were highly unionised. The system was based on the assumption that workers had an employer. Since then, significant changes have taken place which affect its work, particularly the following changes in the UK's industrial structure and labour market:

• of the 3.7 million enterprises in the UK, 99 per cent are classified as small (ie fewer than 50 employees) or medium sized (ie 50-249 employees);[22]
• 32 per cent of employees work in workplaces employing 49 workers or less;[23]
• four out of every five enterprises are run by the self-employed;[24]
• the service sector now accounts for over 75 per cent of employment;[25]
• there has been a substantial increase in professional, managerial and clerical occupations (these rose from 45 per cent of all jobs in 1981 to 53 per cent in 1996) and a corresponding decline in craft and skilled manual occupations (which declined from 18 per cent in 1981 to 13 per cent in 1996);[26] and
• a decline in trade union membership, which in 1997 was 7.8 million, the lowest since 1945.[27]

11. In addition, there is increasing use of out-sourcing and sub contracting and the introduction of new forms of working such as portfolio jobs, part-time work and remote or homeworking. These factors all represent challenges for the way in which the HSE carries out its work and they make its reliance on the legal obligation to control risks and protect workers' health and safety increasingly complicated and potentially more difficult.

12. In 1999, the Department of the Environment, Transport and the Regions (DETR) launched a 'strategic appraisal' of the health and safety system, with the aim of further reducing the rate of workplace accidents and ill health, and addressing the aforementioned 'plateau' in workplace fatality rates. As part of this review the Department published a consultation document Revitalising Health and Safety.[28] We welcome this review and the Department's commitment, set out in the consultation document, to integrate health and safety across Government.

13. The table below sets out the financial provision for HSC/E for the years 1998-99 to 2001-2002. Table 3 shows resources according to activity for the year 31 March 1999.

Table 2 HSE Financial Provision, 1998-99 to 2001-02

Source: HSE evidence (HSE 25)

Table 3 HSE Resources by departmental aims, 1998-99

Source: HSE Annual Report 1998-99, p 175.

14. In addition to Government grant-in-aid, the HSE generates revenue from certain chargeable and statutory services, such as the licensing of nuclear installations, the approval of non-agricultural pesticides and the certifying of electrical equipment.[29] As part of the Government's Comprehensive Spending Review, the HSE will receive an additional £63 million (a 17 per cent increase) in running costs over the next three years. Further discussion of resources can be found at paragraphs 94 and 95.

15. At April 1999, the total staff in HSE was 3,880, of which 1,497 were inspectors.[30] As a result of the increase in funding announced in the Government's Comprehensive Spending Review, an extra 70 inspectors will be recruited.[31]

16. We were broadly satisfied with the structure of the HSE and HSC, as were most witnesses, but a number of issues for the future were raised upon which we have views. These are discussed under the following headings: prevention and investigation work; strengthening the regime; relationship with other agencies; small firms and the self-employed; occupational health; resources; regional variation in enforcement; and the Commission. This is followed by a summary of our conclusions and recommendations.

23  Source: Selden, J 'Small and Medium Enterprises: their role in the economy' Labour Market Trends October 1999 Back

24  Source: Selden, J 'Small and Medium Enterprises: their role in the economy' Labour Market Trends October 1999 Back

25  In June 1999 20.9m people worked in service sector jobs out of a total of 27.7m. Figures taken from Labour Market Trends, December 1999 Back

26  Source: Institute for Employment Research Review of the Economy and Employment, Labour Market Assessment 1996-97 Back

27  Source: Bland, P 'Trade union membership and recognition 1997-98: an analysis of data from the Certification Officer and Labour Force Survey' Labour Market Trends July 1999 Back

28  HSE21 Back

29  The table on p145 of HSC Annual Report 1998/99 gives figures for the HSE's income from chargeable services. Back

30  HSE25, para12 Back

31  Q390 Back