Martin Temple, chairman of the Engineering Employers Federation (EEF), was commissioned in April 2013 to conduct the first Triennial Review of the Health & Safety Executive (HSE) for the Department for Work & Pensions (DWP). It is government policy that all non-departmental public bodies undergo a substantive review at least once every three years and this is the first Triennial Review of the HSE.
The remit of the review was primarily to consider the continuing need for HSE’s functions. Mr Temple concludes that, fundamentally, the functions of the HSE continued to be necessary and that an arms-length public sector body was “the most efficient and effective way to deliver those functions”.
In other words, the review has ruled out privatisation.
The review was not intended to focus on the FFI scheme, introduced in October 2012, but Mr Temple said that he felt “compelled” to address the issue because of “the wealth of comments I received from stakeholders”.
He said: “I am very concerned at the strength of feeling from stakeholders that FFI has damaged HSE’s reputation for acting impartially and independently, and thereby its integrity as a regulator. While few stakeholders disagreed with the principal of charging, concerns centred around two areas: firstly, that FFI is a penalty or fine regime, but without any of the usual safeguards for such statutory schemes; secondly, that the introduction of FFI is linked to the need for HSE to fill the gap in its budget created by the reduction in government funding, creating the impression that HSE has an income target to achieve.”
He continues: “I recommend that, unless the link between ‘fines’ and funding can be removed or the benefits can be shown to outweigh the detrimental effects, and it is not possible to minimise those effects, FFI should be phased out.
“I recommend that, as an urgent action, there should be at least one independent person involved at the first formal stage in FFI appeals for HSE to ensure that the appeal process is independent and impartial, and is seen to be so.”
Mr Temple reports that concerns about FFI fell into two broad categories:
“Firstly, FFI has been understood by many to be penalty or fine regime. At its worst, stakeholders told me that it is against the principles of justice for HSE to act as ‘police, prosecutor, judge and jury’. While this may be a bleak response, I believe this reaction is genuine, and I am inclined to agree.
“Secondly, FFI has been strongly linked to the need for HSE to fill the gap in its budget created by the reduction in government funding. This leads to an impression that HSE has an income target to achieve and, therefore, suspicion that Inspectors’ decisions about where and who to inspect, and what to do once there, will be based on the potential for raising income, rather than an analysis of the risk. For example, a fear was expressed that FFI would create a perverse incentive for inspectors to inspect established companies with ‘good credit’, to find ‘technical breaches’ and hence earn income.” Again, Mr Temple indicates that he shares these concerns.
The full report, Triennial Review Report – an independent review of the function, form and governance of the Health & Safety Executive, can be downloaded here (link).