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Offshore Charging Review Group (OCRG)

Minutes of the Second Meeting on Tuesday 11 April 2000 - Held in Lord Cullen House, Aberdeen

Present:

Ms Anne Sharp - HSE SPDC (Chair)
Mr I Whewell - HSE OSD
Mr N Stone - HSE PEFD
Mr M Reyland - HSE PEFD
Mr A Robb - HSE OSD
Mr K McFadyen - HSE OSD
Mr J Petrie - UKOOA
Mr E Brookes - BROA
Ms J Bugler - IMCA
Mr P Wyatt - Shell
Mr G Mason - Kerr-McGee

1 Welcome, introduction and apologies

The Chair welcomed everyone to the second meeting of the OCRG. As there were some new attendees, introductions were made around the table.

Apologies were recorded for Mr I Bell (OCA), Mr G Pykett (CBI) and Mr R Church (HSE). Mr Reyland was deputising for Mr Isenwater and Mr Mason for Mr D Taylor. Mr Brookes was attending for BROA.

2 Minutes of the previous meeting (15 November 1999)

The minutes had been circulated to all members and no amendments were requested.

3 Matters arising (not covered by the agenda)

(Previous minutes item 2 refers) The minutes of the meeting held with industry on 15 September 1999 had been amended as agreed.

(Previous minutes item 3 refers) The Terms of Reference for the OCRG had been amended as agreed and circulated to all members.

(Previous minutes item 4 refers) Nominations to the Industry-wide Charging Review Group (ICRG) had been received. Mr Petrie and Mr Holman would represent the OCRG. The first meeting of the ICRG was set for 24 May. HSE reported that the view of the ICRG Chair, Clive Norris, was that the group should report direct to the HSC. When presenting the first report the Chair expected to be accompanied by some industry members. HSE agreed to copy papers for the ICRG to members of the OCRG.
Action: HSE (Mr Stone)

(Previous minutes item 6 refers) HSE reported that there was general agreement across the groups on the issues to be covered by the proposed evaluation project. To inform the review a project would be set up to collect data and to undertake a survey of industry. A paper setting out the proposals would be submitted to the ICRG meeting on 24 May.

(Previous minutes item 7 refers) HSE reported on a project to look at the possibility of a component-based charging scheme under COMAH, which would break down the functions and sub-functions and attach a fee to them. It was apparent that industry not only wanted predictability of charges, but simplicity also. Under any alternative charging scheme the fee would have to be sufficiently referable to the work undertaken. HSE suggested that any similar exercise for offshore charging be deferred until clear findings emerged from the COMAH project, by which time there would be a firmer foundation of experience with the existing offshore scheme. Three actions were agreed:

  1. The first papers from the COMAH component charging project, including the project plan and timetable and any preliminary findings, would be circulated to OCRG members before the next meeting.
    Action: HSE
  2. Industry would consider their position on exploring alternative schemes for offshore charging, and respond to HSE.
    Action: Industry
  3. HSE would ask Ian Travers (HID) from the COMAH Charging Review Group to come to the next meeting to outline the work of the COMAH component charging project and preliminary findings.
    Action: HSE (Mr Stone)

(Previous minutes Item 9 refers) Work on benchmarking HSE's charging schemes with those of other public sector regulators had only recently started. It was proving somewhat difficult to identify other public sector regulators who could be said to be true comparators. It was known what those already identified charged, but not as yet how their charges were made up. The Marine and Coastguard Agency and the Foods Standard Agency would be included in the exercise. If members were aware of other public regulatory bodies it would be useful if they could let Mr Stone know. HSE would re-examine the timescales for the work on the basis that industry would like it to be given higher priority. There were, however, other important demands, such as work on the evaluation project.
Action: HSE and Industry

4 Financial report

A report showing the composition of the charge-out rate had been circulated before the meeting. HSE explained that relevant travel and subsistence costs were built in to the rate. HSE annually reviewed fees and charges and aimed to implement any resulting change in April. The hourly rate for offshore charging that came into effect in October 1999, as for gas transportation and railways, will be next reviewed and uprated as necessary in 2001. HSE would explain the reasons for any changes.
Action: HSE

It was also explained that HSE had to account for the work done and income generated as part of its normal accounting procedures. This would be published in a Memorandum Trading Account (MTA) as part of the accounts in HSC/E's Annual Report. It was agreed that OCRG members would be sent a copy of the MTA as a matter of course.
Action: HSE

UKOOA said that there was a need for industry to understand what the activities on an invoice comprised. HSE responded that in reply to requests for additional information duty holders were being sent more detailed 'Timeline Reports', which are produced as part of the invoicing process. It was proposed to issue these reports as a matter of course starting with the next invoice run in June. These reports show the OSD team logging time, the activity date, duty holder, installation, a breakdown of the activity, information on the type of safety case and the hours to be charged against each line. An explanatory note would accompany these reports. It was agreed that an anonymised sample report would be sent to industry representatives.
Action: HSE (Mr McFadyen)

[Post meeting note: Sample report sent 17 April]

The formal disputes procedure had been finalised and copies distributed to members. This should be regarded as a living document with its operation and effectiveness monitored through the ICRG. Industry were asked to consider providing a second nominee, in addition to Walter Winkworth, to serve as an external member of the Disputes panel to Mr Stone, by 11 May if possible.
Action: Industry

5 Industry charging guide

The minutes of the meeting held on 1 March to discuss the guide had been previously circulated to all members. Industry had responded to an action on them to provide a redraft of Annex A, para 3.19 and there had been subsequent correspondence on this. Whilst HSE understood the reasoning why it was felt no charges should be raised for inspections on vessels, the regulations required charging for enforcing all relevant statutory provisions on activities in connection with an installation. It was agreed that further discussion was required outside the main group, and that HSE would attempt to revise the wording of this paragraph as a basis for that discussion.
Action: HSE

6 Efficiency plan

A paper on efficiency from the COMAH Charging Review Group (CCRG) was circulated at the meeting. HSE explained that the delivery of efficiency savings was part of its normal management process. A goal of 3% pa efficiency savings had been set by Government. HSE sought contributions from all its Divisions/Directorates (D/Ds) to help achieve this goal. These savings could be achieved by producing the same outputs with fewer staff, or by increasing outputs with the same staff, for example through the introduction of new IT systems or process re-engineering. HSE's proposals for savings were scrutinised by DETR, Internal Audit and the National Audit Office. HSE had its own Business Efficiency Unit which ensured that the D/Ds delivered. Charging was seen as a benefit to efficiency, as it increased transparency. All the charging review groups would keep this area under the spotlight, and the CCRG paper set out how proposals for the three COMAH Competent Authorities could be taken forward.

The formation of the Hazardous Installations Directorate (HID) was expected to generate savings. A planning review was underway, which would address issues concerning the organisation of the new Directorate, but any resulting changes would not necessarily reduce the charge-out rate.

Industry said that it would be looking for cost savings and asked how outputs were measured. HSE responded that this was a difficult area, which had received considerable attention over the years. The nature of the health and safety regulator's role meant that outcomes were difficult to demonstrate. Activity measures, such as the number of notices issued or inspections undertaken did not address qualitative issues. The emphasis was now moving towards outcomes and hard targets, such as reducing the number of accidents, but even this was a complex measure, affected by a huge range of factors, not all within HSE's control.

Industry felt that the COMAH paper was giving the right message, particularly in paras 6 and 10 iii, where reducing time on regulatory activities and improving efficiency and effectiveness in assessment were mentioned. It was agreed that HSE would produce a paper for the OCRG covering similar issues relating to principles for the conduct of its business'.
Action : HSE

7 Any other business

It was agreed that it would be sufficient to place an abbreviated form of the minutes on the Internet.
Action: HSE

8 Date of next meeting

The next meeting will be held on Tuesday 19 September 2000 in the Rose Room at HSE's London office.


Updated 2008-12-05