94. As we stated above (paragraph 14), the HSE will receive an additional £63 million (a 17 per cent increase) in running costs over the next three years as part of the Government's Comprehensive Spending Review. This additional funding is dependent on the extension of its charging regime.[158] Charging will be extended to the gas transportation, offshore and railway industries and will generate £43 million of the £63 million additional revenue. After some initial resistance the Commission has accepted this proposal. The extension of COMAH Regulations enables HSE to charge for the assessment of safety cases in these industries and came into force on 1 October 1999.[159]

95. The Minister told us that he hoped the additional funding would translate into a rise in numbers of inspectors and in more investigations and prosecutions.[160] We welcome this additional funding. However, a number of witnesses told us that the HSE required still more resources. Apart from additional funding from DETR, there would appear to be two options:

• further extension of the charging regime; and
• retention of costs and penalties from prosecutions.

Charging

96. Currently firms, mainly in the chemical manufacturing sector, are charged for inspections under the COMAH (Control of Major Accidents and Hazards) Regulations which were introduced in 1999. We accept that there is a valid rationale to COMAH, the principle being to pass the cost of high risk industries onto employers. The TUC told us "there is a logic to requiring enterprises conducting necessarily hazardous, but nevertheless lucrative, activities to pay for their permit to act".[161] However, a number of problems have been encountered since the COMAH Regulations came into force. Witnesses told us about inconsistencies among inspectors regarding what activities are chargeable; excessive charges for the office time of inspectors; employers feeling discouraged from contacting their inspector in fear of being charged for advice;[162] and daily charge rates for COMAH inspections being set "at a level much higher than the fees charged by many private consultancies".[163]

97. In addition, the majority of evidence we received was opposed to the general principle of charging and to its extension to other regimes. The key concerns were that:

• it represents an extra burden on businesses;[164]
• it may become a disincentive to good safety practice;[165]
• it may introduce distortions into the way in which inspection priorities are determined (for example, there may be a temptation for inspectors, since they have to meet income targets, to do more inspections in those workplaces where payment is easier to extract rather than those with poorer safety standards);[166] and
• it may have an adverse effect on inspectors' relationships with employers.[167]

98. Witnesses representing industry and commerce also generally opposed the introduction of charging and the CBI told us "it would drive enforcement down the wrong route".[168] We accept that the problems with COMAH may be teething problems which may in time be resolved. However, we have some reservations about the Government's enthusiasm for extending the application of charging to other inspection regimes. Great care will have to be taken that this does not substantially add to burdens on businesses, particularly in the case of smaller firms. Instead, we believe that the best way to protect workers and the general public against dangerous practices is for regulation to continue to be funded by the Exchequer.

Fines

99. We are pleased that the revenue from the charges for COMAH inspections goes to the HSE. We are, however, disappointed that the same principle does not apply to fines awarded in successful prosecution cases. Any fines awarded to the HSE in successful prosecutions are routed back to HM Treasury.[169] There is little doubt in our minds that it would be more motivating for inspectors, and indeed may have a positive impact on levels of prosecutions, if the HSE was able to retain the proceeds. We therefore recommend that both fines and costs awarded against defendants for health and safety offences are hypothecated to the HSE.

Staffing

100. Very few issues were raised in connection with staffing. The exceptions were praise for the high quality of most inspectors[170] and the problem of inconsistency across the regions, which is discussed below at paragraphs102-105 .

101. We learned, as a result of the site visits some of us undertook, about the challenges facing inspectors. One of our main concerns relates to the burden of administrative work that has increasingly fallen to the inspectors. We believe that a better use of their skills would be to maximise, up to a reasonable level, the time spent in the field. Our second concern relates to the difficulty in some regions of retaining experienced inspectors. The Director General of the HSE cited that turnover in the HSE was "normal" at 2-3 per cent.[171] This certainly compares well with an average for UK workplaces of 11 per cent.[172] It does, however, mask what may be regional variations: there appears to be a particular problem in the South East, partly because a buoyant labour market means there are many attractive alternatives open to trained and experienced inspectors, often in the private sector.

158  HSC Annual Report 1998/99 p58 Back

159  HSC Annual Report 1998/99, p67 and HSE21 Back

160  Q390 Back

161  HSE18, para7 Back

162  HSE11 Back

163  HSE22, para3.3.1 Back

164  HSE17 Back

165  HSE18, para7 Back

166  HSE03 Back

167  HSE03 Back

168  HSE17 Back

169  Q378 Back

170  HSE05, HSE18 Back

171  Q276 Back

172  Source: Office for National Statistics (LFS database) Back