Health and Safety (FEES) regulations: Charging for the approval of First Aid training courses regulatory impact assessment
1 These proposals arise out of a recent review in which the Health and Safety Commission (HSC) looked at the feasibility of introducing charges in statutory permissioning regimes for assessing safety cases, granting approvals, and associated regulatory activities. The review recommended that certain activities that fell within HSC/E charging policy guidelines, but for which no charge is currently made, should be further examined. One such activity is the approval of first aid at work (FAW) training.
2 These proposals do not address health and safety risks. The current regime of FAW training approvals will be maintained.
3 The proposals will enable HSE to put in place a fees regime to recover the costs of it's activities with respect to considering applications for approval and ensuring the appropriate standards are met. The principal costs incurred are those of staff time in HSE's First Aid Approvals and Monitoring Section, and also the work of HSE's contractor in undertaking assessment and monitoring.
4 The Health and Safety (First-Aid) Regulations 1981 place a duty on employers to make first-aid provision for their employees. Any subsequent charging regime will need to be implemented via statutory instrument, and it is intended to use the Health and Safety (Fees) Regulations 2000 (as revised) for this purpose. Given this, there are two broad methods of charging:
5 These two options are discussed in further detail below.
6 In common with other recent charging proposals, these proposals represent a transfer of funds from the private to the public sector in the first instance. Since the organisations affected are commercial concerns, we might expect any additional costs to be passed through to consumers. However, the consumers affected are likely to be representative of society as a whole, since the organisations are representative of many different sectors of industry. The overall effect of the transfer of funds should therefore be neutral. Furthermore, the actual scale of the costs involved is very small compared to industry turnover.
7 The financial issues surrounding charging have been examined by HSE. There are no other significant economic impacts.
8 The proposals will maintain the benefits of the current FAW regime.
9 There may be efficiency gains in making charges explicit, where they were not before. For example, there may well be an extra incentive for training providers to ensure the training will be given approval in the first instance, without repeat visits from an assessor. Similarly, there may be additional incentives to ensure that standards are maintained, so that repeat visits are not deemed necessary during post approval monitoring.
10 All business sectors will be affected by these regulations, in that at least some organisations across all sectors may be applying for approval, renewal of approval, or be subject to post approval monitoring at any one time.
11 HSE's planned work volumes associated with the approval of first-aid training courses are for pre-approval work on 150 cases and around 430 monitoring visits (including repeat visits if necessary) on existing approvals. These figures are based on the regime in 1997/8 and forecast for 1998/9, during which time an outside contractor has been appointed to carry out the majority (around 90%) of the work Information for years previous to this is not considered indicative of future work. The pre-approval work may include an additional site visit where a shortcoming in training is identified, and it is expected that this will be necessary in around 20% of cases.
12 Full economic costs will be recovered from industry. It is proposed that charges will fall on the persons or businesses applying for approval. The average costs to HSE and/or HSE contractors for carrying out this work are as follows:
13 Given the expected numbers of each type of activity, this suggests that the total yearly cost to industry for approval and monitoring will be as follows:
(150*£870) + (20%*150*£300) + 430 * (80%*£340 + 20%*£300) = £282,000
14 Costs of routine renewals are relatively small, so the total cost to industry is expected to be not more than £300,000 each year.
15 The average Initial cost incurred by a training organisation has been estimated at approximately £930 in 1999/2000 prices. This cost relates to organisations requiring an Original Approval. However, training organisations which have received Approval, i.e. meet current compliance criteria, will only incur the Recurring costs. These costs have been estimated at approximately £460 over a five-year period and include the cost of a license renewal and Post-Approval monitoring. Training organisations requiring the Original Approval will incur both sets of costs which gives rise to an average cost of £1390 over a five-year period. The costs incurred by different organisations will be in direct proportion to the extent it undertakes FAW training.
16 Total compliance costs to industry are estimated at around £300,000 each year. These costs will rise slightly in real terms in future years.
17 The issue of whether there are any disproportionate costs on SMEs depends on the option for charging introduced. If, as proposed, fixed rate fees are introduced based on the average costs of carrying out the activity, then it is possible that SMEs may be faced with relatively higher costs than those faced by large enterprises, since the scale of the work on an individual case may be lower than for larger organisations. However it has been noted following discussion with the First Aid industry (AIFAWTO), that many smaller providers already comply with the criteria and thus will incur only the recurring costs which, are less than half of total unit costs for organisations requiring an Original Approval.
18 However, an analysis of how actual costs are likely to vary suggests that the fixed fees proposed have a sufficiently close relationship to actual costs that the fee can be designated as a charge rather than a `tax' under HSE's charging powers. This suggests that any disproportionate costs born by SMEs will be small in relation to the scale of the charges, which in themselves are small in relation to turnover even amongst SMEs.
19 The costs to industry exclude certain costs, which will continue to be born by HSE. These include policy work undertaken by HSE's Health Directorate (around £7,000 in 1996/7), and also verification work undertaken by Regional Support Group specialists in HSE's Field Operations Directorate (around 20 days each, as needs arise). These costs cannot be forecast with any accuracy.
20 There are no other costs associated with these proposals, except the costs of developing the proposals (including staff time spent on the feasibility study). These costs can now be considered as `sunk'.
21 There are no costs to society as a result of these proposals.
22 There are no environmental impacts as a result of these proposals.
23 There are no costs or benefits to society as a whole.
24 The numbers of organisations involved in FAW activity is high enough for costs to be forecast with some degree of accuracy, and similar numbers are expected to be involved in the future. There are no other uncertainties.
25 HSC/E intend to formally review the charging regimes after two years.
