Health and Safety
Executive / Commission
Press Releases
Today, at the British Chambers of Commerce annual conference in London, the Health and Safety Commission (HSC) launched a 'ready reckoner' for Britain's businesses to help them work out how much work-related accidents and ill-health are costing them.
Health and safety failures currently cost Britain's employers up to a staggering £6.5 billion every year. Over 25 million working days are lost annually, with over a million workers suffering from work-related accidents and even more falling prey to work-related ill-health.
The ready reckoner is particularly designed to help small and medium-sized businesses (SMEs) and comes both as a free leaflet and as an interactive web site, which users can find at: www.hse.gov.uk/costs. The reckoner explains the associated costs of accidents and ill health at work, helps users to work out how much their own firm might be losing, and provides advice on how to avoid such costs. It also includes real-life case studies showing costs to firms that have suffered financially as a result of poor health and safety performance.
Bill Callaghan, Chair of the Health and Safety Commission (HSC), said:
"Poor health and safety performance is a competitiveness issue and employers who want business success cannot afford to ignore it. Work-related accidents and ill-health are costing Britain's bosses billions every year, and yet there are still too many who don't even realise how much their own firms are suffering.
"Not all of these costs are immediately apparent, which encourages ignorance and helps to create a culture of complacency. Also, many employers mistakenly believe that their insurance will cover the tab, but many policies will not cover losses such as reduced production, replacement labour and legal fees. The ready reckoner highlights the many factors that can send the bill rocketing - and gives sound advice to those who want to prevent it doing so."
The HSC's small business representative, Commissioner Judith Donovan CBE, said:
"Small firms are often operating on tight margins. They may not have experienced many accidents or cases of ill health, but when they do these can often have a disproportionate impact on the business. Small firms often have little cushion against these costs, and as the leaflet and web site make clear, insurance policies may not cover the bill."
The leaflet includes three simple ways to estimate what accidents may be costing firms each year, and an easy-to-use form to record the costs of an incident so employers can work out for themselves the real cost to their organisation.
The ready reckoner web site has been designed to be a mine of information on the costs of work-related accidents and ill health. As well as providing further information on the subject, it has: interactive calculators to help organisations better estimate the costs of injuries and ill health; an interactive form to record the costs of incidents; case study material illustrating the economic and business impact of accidents and ill health; and a facility for users to send information to HSE for inclusion on the web site.
The HSC welcomes feedback on the web site and there is an online facility which means this can be done very easily. The Commission also intends to expand the web site over the next year and would particularly welcome organisations that carry out their own research on the cost of accidents and ill-health to share the results. The best examples of good practice will be used on the web site, subject to the exemplar's prior consent.
1. The ready reckoner was promised as part of the Government and HSC's 'Revitalising Health and Safety' action plan to reduce accidents and ill-health in Britain's workplaces. The Revitalising initiative was launched by HSC Chair Bill Callaghan and the Deputy Prime Minister in June 2000. It aims to achieve, by the year 2010, the following national improvement targets: reduce the incidence of working days lost from work-related injury and ill-health by 30 per cent; reduce the incidence of people suffering from work-related ill-health by 20 per cent; and reduce the rate of fatal and major injury accidents by 10 per cent. There is an additional target of achieving half of each improvement by 2004.
2. The ready reckoner leaflet is being distributed to around 500,000 businesses over the next 12 months. It will be distributed mainly through insurance companies by direct mail and this initiative is being organised by the Association of British Insurers.
3. Health and safety failures cost British employers between £3.3 bn and £6.5 bn every year, of which between £0.9 bn and £3.7 bn is due to accidental damage to property and equipment (The costs to Britain of workplace accidents and work-related ill-health in 1995/96, available from HSE Books, ISBN 0 7176 1709 2).
4. A study by Lawrence Bamber, now Associate Consultant with Norwich Union Risk Services, determined the following average uninsured costs of accidents: £2,097 for an injury causing an absence from work; £33 for every injury requiring first aid only; and £141 for every accident causing no injury, but damage to property, plant and equipment. HSE has calculated that for the typical cost of a serious or major injury to employers is between £17,000 and £19,000 - and that in 2000-2001 there were over 27,000 major injuries to employees.
5. The 2000/01 Labour Force Survey shows that over half of all people injured at work have to take one or more days off work as a result. Nearly one quarter will be off for a week or more.
6. Major injury and ill-health costs not covered by insurance can include: lost time; sick pay; damage or loss of products, equipment and raw materials; repairs to plant and equipment; extra wages, overtime working and temporary replacement labour; production delays; investigation time; fines; loss of contracts; legal costs; and loss of business reputation.
7. In 2001 Norwich Union Healthcare published a study that found the direct costs of sickness absence in the British work force was £534 per employee, with indirect costs twice that figure. The total cost per employee per year of sickness is £1,600 - around 9 per cent of payroll costs. Work-related ill-health, unlike injuries, can often go unnoticed. This means they can get progressively worse until they become permanent or disabling. Typical workplace ill-health includes: stress; musculoskeletal disorders (like RSI); asthma; dermatitis, asbestos-related diseases; deafness and hearing loss; vibration-related disorders; and cancer.
Single copies of INDG355, Reduce risks - cut costs: the real costs of accidents and ill-health at work can be ordered online at http://www.hsebooks.com or are available from HSE Books, PO Box 1999, Sudbury, Suffolk, CO10 2WA, tel: 01787-881165 or fax: 01787-313995. It is also available in priced packs of 15 on ISBN 0 7176 2337 8. It can be downloaded from the ready reckoner site at www.hse.gov.uk/costs
Call HSE's InfoLine, tel: 0845 345 0055
or write to: HSE Information Services, Caerphilly Park, Caerphilly
CF83 3GG.
Published on the HSE web site on 23 April 2002