Mr Kevin Allars, Chairman, HSE
Mr JM Jones, NFA
Dr LP Metcalfe, NFA
Mr I McPherson, UKPIA
Mr R Shuttleworth, LPGA
Mr M Reyland, HSE
Mr B Davis, EA
Mrs P Nash, HSE
Mr K McFadyen, HSE (Secretary)
1. The Chairman welcomed everyone to the meeting. Mr Shuttleworth had replaced Mr Fidell who had retired. Both Mr Jones and Dr Metcalfe were deputising for Ms Gilbert. Apologies had also been received from Mr K Dixon-Jackson, CIBA Speciality Chemicals, Mr A Radway, EA and Mr F McMahon, SEPA.
2. The minutes were agreed by correspondence and published on HSE’s website.
3. The revised Queries and Disputes Procedure (Min 23) has been agreed and should be on the HSE website by 20 October.
4. Alternate charging methods (Min 24) is an agenda item.
5. Details of the HSE and SEPA outturns had been circulated previously. The EA figures were handed out at the meeting. An overview of the HSE and EA figures was given. Both had an outturn target at the level of their current hourly rates. EA had achieved this but HSE had not. The problem for HSE had been designated as the “Buncefield effect”. The recoverable percentage of costs is calculated using chargeable hours relative to the total amount of front line hours. This means that the more chargeable hours worked, the greater the costs that need to be recovered and therefore the greater the hourly rate should have been. Buncefield had created a lot of additional chargeable work, although no additional HSE staff were employed to deal with it. An approach has been made to HM Treasury for this to be regarded as an exceptional event that should not affect the setting of rates.
6. SEPA were not present to comment on their outturn report, but their annual report and accounts can be accessed via the SEPA website at www.sepa.org.uk.
7. Industry asked if it were possible to provide a break down of the gross salary costs. Mr Reyland agreed to liaise with his counterparts in EA/SEPA to see what could be provided.
8. It was explained that the travel costs were the recoverable element of actual travel and subsistence costs, not travelling time. Travel time is not directly charged for.
9. The proposed rates:
were notified to members prior to the meeting. All the increases are in line with inflation.
10. HSE said that its efficiency savings were still ongoing and that they were subject to severe budget restrictions. Their pay bill had gone up by 3.9%, but the proposed rate was less than the 2005/06 costs and is essentially standing still.
11. EA is similarly affected by increased costs. Their pay costs had increased by 5%, including unavoidable pension costs. This increase was needed to attract new staff of the right calibre. Other costs had increased also and the inflation rate increase in the hourly charge actually reflected an efficiency saving of around 2%. EA also tried to align their rate with that of HSE to make for a common cost across England and Wales, unless a different rate was unavoidable.
12. SEPA had reported a drop in income of about 33% in 2005/06.
13. Industry members felt that the increases were generally reasonable, that the CA should keep bearing down on their overhead costs and encourage efficiencies in the work of inspectors.
14. The Chairman introduced Mrs Nash who was leading a project to look at alternate charging methods. Industry has had concerns regarding the predictability of costs and inspectors have issues with charging that distract them from the work they feel they should be doing. At present this is an HSE initiative with EA/SEPA holding a watching brief.
15. Mrs Nash said this review would seek out industry concerns, revisit the 2001 review (Component Charging Feasibility Study) and the Deloitte & Touche Evaluation of the impact of charging on COMAH (2002). The 2001 review did some work on a component-based scheme linked to the regulatory effort involved. This was not pursued. Can we build on the work done? Is it feasible? Would such a process be acceptable to industry and how could it be taken forward? If industry agreed this was the way forward, work would be undertaken to fully develop the scheme. A steering group chaired by HSE’s Head of Policy Division with members drawn from industry is being set up to consider this.
16. To change to a levy system requires a change to the HSW Act. It is very difficult to get a slot in the Parliamentary timetable for such a major legislative change. It could take 3-5 years. However if industry fully agreed to a component charging scheme it may not be necessary to change the Act.
17. Previous stakeholder views were mixed regarding changing the system and they need to be revisited. Changing the system was not seen as top priority for UKPIA members and they are not pressing for change. The hourly rate is seen as an incentive for operators to get things right first time. The component system has to reflect the costs involved within 15%. It can become very complicated and there will be winners and losers.
18. NFA members were fairly new entrants to the COMAH regime and thought the current method OK.
19. The Chairman said that big industries seemed less bothered by charging by the hourly rate. Pressure was coming more from medium size industry largely represented by the CIA. The DTI is chairing an industry/regulator group looking into developing a Regulation and Recognition Scheme to assist in a more transparent means of adopting risk-based interventions. This scheme would include a scoring system that could be used to base charges on. This is currently being trialled, although there are difficulties in getting a representative sample of companies to take part. EA’s experience of OPRA will also be useful for the review HSE is undertaking. Members will receive feedback as the review develops.
20. None was raised.
21. Members agreed that the need for future meetings should depend on the substantiveness of the agenda. A provisional date of 9 October 2007 was set for the next meeting in London.
Updated on 01/01/2007