Mr S Wing, HSE, Chair
Mr Paul Clark, AIPGT
Mr David McHugh, Transco
Mr Victor Isenwater
Ms Paula Moorhouse
Mr Kelvin McFadyen, Secretary
The Chair welcomed everyone to the meeting. Apologies had been received from Mr Clive Musgrave (Transco), for whom Mr McHugh was deputising, and from Mr Bill Tomkins (HSE).
The minutes had been circulated for comment prior to publishing on the Internet and were formally accepted.
The note had been circulated for comment prior to publishing on the Internet and was formally accepted.
9 October Meeting
29 January Meeting
HSE reported that efficiency gains could only be accounted for when they were realised, not when they were only prospective. HSE has a number of reviews underway that have or should provide gains. The buildings occupied and their locations are under review as are the staff (posts) based in London to see whether jobs could be done elsewhere. Currently posts identified as relocateable are being moved when they become vacant. The new Bootle HQ building should provide efficiency gains, but these are unlikely to be realised until around 2007. The balance between front line and back office staff is being reviewed and some identifiable savings from that have fed through to the 2005/06 rate.
The brigading of some back office functions such as personnel, training and IT support are shortly to be brigaded into an Operations Group Support Unit, with any surplus staff or funds transferred to front line functions. In addition, less expensive administrative staff are being recruited and trained to undertake roles as Regulatory Compliance Officers, freeing up inspector time from more routine health and safety issues such as dealing with industry enquiries and gathering investigation data. The Operations Group comprises the Hazardous Installations Directorate, Nuclear Safety Directorate, Field Operations Directorate and the Railways Inspectorate. For HID the brigading of back office functions currently mean the loss of 31 staff supporting the Directorate of c600 staff. 81 staff will carry out those support functions for the whole Operations Group comprising some 2600 staff. HSE has a target of increasing front line work by 20% over 4 years. We are 2 years into that process and gains are starting to happen and work through.
In addition to the initiatives above there are outside reviews taking place. The Hampton Review mentioned in the last Budget Speech is looking at regulatory efficiency and its impact on industry. HSE has made submissions to the review. Various ideas are emerging from this review, from having a single regulator down. The review report is due to be sent to HSE soon to check for factual accuracy, before being presented to Government at the end of the year. There is also a House of Commons Select Committee report on HSE work, which has not been responded to yet.
The ability of HSE to generate savings from these various initiatives and reviews takes time. The move of the Railway Inspectorate to the Office of the Rail Regulator was announced some time ago, but is unlikely to be completed until about 18 months time. This is because legislation is required for the move to happen and the legislative timetable is very busy. If any of the recommendations from the Hampton Review require legislation, such as merging of regulators, there will be long lead times.
A new single IT system for HSE's operational intelligence data and time recording is being developed. This should go live next year. There will be start up costs, but efficiency gains should be realised in time. Similarly the greater use of home working will provide gains in time, but there are start up costs for hardware and software.
The outturn rate for 2003/04 was £121 against the £110 charged. The proposed rate for 2005/06 was £116. This rate took account of cost rises to HSE including inflation and increased superannuation charges, balanced against savings from the back office review and other initiatives. The gas rate is very susceptible to small changes in cost/benefits because it is a relatively small scheme. The rate is benchmarked against other schemes to ensure comparability.
Industry asked why the gross salaries costs in the 2003/04
outturn were higher than 2002/03. HSE did not have the figures to
hand but agreed to look at them to provide an answer.
Action: HSE (Mr Isenwater)
Industry asked for the findings of the three pilot flexible
working exercises to be presented. These were noted under section 6
of the autumn update of the Charging Review Group, and were due to
be completed in June 2005. HSE did not have the results to hand but
agreed to look into this to provide an answer.
Industry noted the initiatives to produce efficiency gains and looked forward to future savings. They also asked if any future over-recovery of costs could be rolled forward to subsequent years. HSE agreed to review any future over-recovery of costs and whether it could be returned to duty holders in some way.
Para 4.9 of the fees and Charges Guide says 'Fees may not be increased in order to recover any deficit, whether in-year or for a previous year or for a previous year, without a Section 102 order.'
&, in relation to surpluses para 4.10 of the guide includes - 'If a surplus is made inadvertently or results from the rounding of fees ... the body is not required to reduce future fees so as to make a compensating deficit, nor is it necessary to make a new fees order during the year (unless the surplus is large in relation to the cost of the service, in which case the situation should be discussed with the Treasury).'
Mr Clark confirmed that he was willing to continue as an
independent member. Mr Musgrave would be contacted separately.
The Chair said that he proposed to have a meeting with the 'new players' coming into the business shortly after they take over. He wondered whether that should also be the next meeting of the review group. Industry felt that the meeting could be used as a good induction to charging but that the review group meeting should be separate.
It was agreed to hold the next meeting on 19 October 2005, in Bootle, after the COMAH group meeting.