Health and Safety
Executive / Commission
Regulatory Impact Assessments: Chemicals
1. It is estimated below that there are between 1,500 and 3,000 new cases of occupational asthma each year. The total incidence of reported cases has not gone down over the last six years and for some causes is actually rising. This has prompted HSC to look at the existing legislation on exposure to substances which can cause asthma at work.
2. The term occupational asthma does not pre-suppose any particular mechanism of reaction and therefore includes both allergens and other specific mechanisms, e.g. repeated low level irritation. It does not include agents that aggravate pre-existing asthma. In 1995, the Survey of Work-related Illness (SWI, based on self-reporting by affected individuals) found 151,000 people judged themselves affected by work-related asthmatic symptoms at some time in the last year.
3. The number of new occupational asthma cases each year is less clear. HSE monitors new incidence of work-related asthma through the Surveillance of Work-related and Occupational Respiratory Disease scheme (SWORD). In 1997, the SWORD project identified 1,136 new cases of occupational asthma. This figure, however, may underestimate the number of new cases, as the data needs to be extrapolated from participating occupational and chest physicians to obtain a national estimate. A recent review of the data suggested that SWORD may underestimate the incidence of diagnosed occupational asthma by at least a third. On this basis the incidence of diagnosed occupational asthma may be around 1,500. Further not all cases of occupational asthma are reported to occupational or chest physicians.
4. To obtain an estimate of the upper bound to the number of new incidences of occupational asthma, we can refer to the SWI survey. If we assume that the average length of time in employment of SWI respondents is 20 years (half the maximum working life) then the average number of self-judged cases of work-related asthma occurring for each year's worth of employment is 151,000/20. Of these, the survey reported that 37% were said by the respondent to be caused by work, giving a yearly occupational incidence rate of around 2,800. A similar number can be arrived at by looking at the number of respondents in this sample who reported work-related asthma with a date of onset within the last five years (to control for any historical reductions in incidence). This proportion was 23% of the total incidence of 151,000, or 35,000. This would suggest a recent average incidence of 35,000/5 = 7,000 new cases each year, or around 2,600 cases caused by work.
5. The SWI found that of the cases attributed to a work-related cause, around half had been reported to a specialist physician. On this basis the SWI figures would suggest that SWORD should see around 1,400 cases a year and this is broadly consistent with what is found. The true incidence of new cases of occupational asthma is therefore likely to be around 1,500 to 3,000 each year. Having said this, it should be remembered that there may be equal numbers with a preexisting condition who may also derive benefit from the proposed ACoP.
6. The objective of the proposed ACoP is to contribute to HSC's goal to reduce the numbers of people affected by substances which cause occupational asthma. Asthma is an extremely disabling disease and can occasionally prove fatal. Compliance with the law should reduce the numbers of people developing symptoms such that subsequent contact with the substance triggers an asthma attack. It will also reduce absence through sickness, loss of production and high staff turnover, recognising that without adequate controls replacement staff will also be put at risk.
7. HSC believes that the current regulations (COSHH) provide a robust regulatory framework within which to control exposures, and will continue to identify suitable exposure levels for individual substances taking account of scientific judgment. Prescriptive health and safety regulation about asthma could well be unreasonable and unenforceable. HSC does not believe that there is a convincing case for more law, therefore no new regulations are proposed.
8. New regulation would also entail significant implementation costs. As it is possible to reduce the number of people affected by substances which cause or aggravate asthma by other means, the option of new regulation is discarded.
9. HSC attaches a high occupational health priority to enforcing existing controls but believes that there is great merit in seeking and maintaining a high employer/ee awareness of the occupational causes of asthma and how the issue should best be addressed. HSC has already supported a targeted publicity campaign ('Breathe Freely'), at an approximate cost to HSE of £110,000 and produced guidance to duty holders (e.g. Preventing Asthma at Work). However, these measures alone have not been sufficient to reduce the incidence of occupational asthma and have had limited effect in changing work practices or promoting the implementation of substance control measures.
10. As part of HSC's strategy to combat asthma, an ACoP is proposed within the existing COSHH framework. The advantage of this approach is that an ACoP spells out good practice, will assist enforcement and publicity campaigns, and allow employees or their representatives to bring good practice to the attention of their employers should they be failing in their duties.
11. The proposal will outline good practice for all employers, without discriminating in terms of levels of protection. There are therefore no issues of equity and fairness other than the balance of overall costs and benefits outlined below.
12. We estimate the scale of existing ill-health caused by occupational asthma exposure from case-reports, studies of sensitisation frequency in exposed worker groups from surveys of occupational ill-health, and data surrounding benefit claims. Costs of the ACoP are estimated using existing information on the types of control, and statistical data on the numbers of employers likely to be affected.
13. We discount costs at a rate of 6% per-annum following HM
Treasury guidelines. Discounting allows for individuals'
observed preferences towards current spending, and rising real
income over time. We uprate labour costs by 2% per year in line
with medium-term real earnings growth. Finally, benefits are
discounted at 2%, again following HM Treasury guidelines. Costs and
benefits are shown at 2001 values.
Appraisal period
14. We estimate the costs and benefits of adopting the ACoP over a ten-year-period from 01 January 2001. The choice of baseline does not affect the balance of costs and benefits of the proposals, nor is it intended to suggest when the proposals might come into force, if they are adopted.
15. Controlling exposure to one substance may not give the same benefits as controlling exposure to another, even if they have the same potential to cause occupational asthma. For example, workers may move, with relative ease, to a different post (and thus minimise income loss) where exposure occurs in a few activities in a large firm. Alternatively, a specialist worker, with occupational asthma due to a substance which is an integral part of applying their specialist skills, may find alternative employment more difficult to find. For some individuals, occupational asthma may also affect leisure and social activities.
16. Work-related respiratory illness causes costs to the individual, employer and society as a whole. The most significant direct costs fall to individuals (and equivalently society) in loss of actual or potential income (equivalent to productivity), and in the suffering of those individuals involved. These are estimated below. Direct costs are also incurred by firms in employee absence, administration and recruitment and retraining, although costs of absence are subsumed in the societal costs above. Finally, costs are incurred by society in medical treatment and recuperation.
17. Quantified costs are as follows:
18. We do not estimate administrative costs to firms in dealing with absence, recruitment or retraining. It should also be noted that any work-related illness has wider effects on those concerned and their families, which also remains unquantified.
a) loss of income
19. A high proportion of asthma sufferers have to change their jobs. Depending on circumstances, this may mean a change of employer or a change of jobs within the same firm. A follow-up sample study of workers with confirmed occupational asthma[1], found about half had to change jobs and as a result lost income. The median reported income loss was £3,888 per-year. We assume this group is typical of occupational asthma sufferers.
20. The value of lost output can be proxied by the wages paid to the worker by the employer. This will be their gross earnings plus non-wage labour costs (employers national insurance, superannuation, etc.)[2]. We make an allowance for non-wage labour costs, at around 30% of gross earnings. We also increase the loss of earnings figure to 2000/01 prices, in line with nominal earnings' growth. Overall, this gives an estimated loss of output figure of around £6,800.[3]
21. Some asthma sufferers will not have to change their jobs, but will take some time off work during the year as a result of their illness. While this is likely to result only in a partial income loss to individuals (because of sick payments, etc.) there will be costs to employers and society through loss of output and extra administration.
22. The LFS revealed that, of those who had to take time off work, the average number of days' absence per-year was 14. We assume that half of the occupational asthma sufferers who do not change jobs take, on average, 14 days off each year, because of their illness. Based upon average earnings plus an allowance for non-wage labour costs, 14 days' absence costs society £1,554 in lost productivity, or £1,713 in year 2001 values (which we round to £1,700).
23. For the remaining 25% of occupational asthma sufferers we assume they do not take time off work and therefore do not experience any loss of income.
24. Therefore the average annual loss of output associated with each income, to an individual with occupationally-related asthma, we estimate as follows:
(0.5 x £6,800) + (0.25 x £1,700) + (0.25 x £0) = £ 3,800 (approx.) per-year
b) medical treatment
25. The Office of Health Economics estimates the average annual cost of medical treatment for asthma sufferers in 1987/88 was around £115 per-case - just over half of this is accounted for by hospital services and is free to the individual. Prescription charges account for part of the balance. In 2001 prices, this total cost to society would be around £244 per-year, however diagnosed occupational asthma involves treatment by specialist medical practitioners. We believe a more reasonable estimate relating to occupational asthma would be around £600 per case each year.
c) pain and suffering
26. This section uses estimates published by HSE[4], based upon research undertaken at East Anglia University, into the relative severity of different illnesses and injuries ranked by their severity. Using Department of the Environment, Transport and the Regions values attached to risk of injury reduction we translate these welfare losses into monetary values.
27. We estimate a non-permanently-incapacitating-illness involving outpatient, or GP, treatment involves a welfare loss of around £2,000 in 2001 prices (around £1,000 in 1990 prices). Since this related to cases where there were over 7 days off work, we assume, for those absent because of respiratory illness (at an average of 14 days), their welfare loss is around double (say £4,000 in 2001 prices).
28. We estimate a permanently-incapacitating-illness involves a welfare loss of around £136,000 in 1995 prices, or 186,600 in 2001 prices. For those having to change jobs, we expect the welfare loss to lie between this figure and the welfare cost for an individual needing to take some time off work, but probably much closer to the latter. We assume this cost may lie between £6,000 and £11,000.
29. Finally, there are those who experience occupational asthma but do not take time off work. Although there is no loss of income, there will still be an element of pain and suffering. We make a notional allowance of £150 for the pain and suffering from minor cases of ill-health (a figure from Davies and Teasdale of £50 uprated).
30. Therefore, we estimate the loss in terms of pain and suffering of occupational asthma, on average, is as follows:
(0.5 x £6,000 to £11,000) + (0.25 x £4,000) + (0.25 x £150) = £4,000 to £7,000 approx.
31. This is not an estimate of the value of pain and suffering each year. It is an estimate for pain and suffering, in present value terms, expressed by how much individuals are willing-to-pay today to avoid having occupational asthma, the effects of which might last for many years.
32. The estimates relating to loss of income and medical treatment are annual costs. Therefore, undiscounted over ten years, loss of income and costs of medical treatment would be £38,000 and £6,000 respectively. Discounting gives a present value of around £31,600 for loss of income and £4,400 for medical treatment.
33. Adding these costs to those estimated for pain and suffering in paragraph 29, yields an average cost-per-case of between £42,000 and £45,000. Given the fairly narrow range, we take £43,000 as a point-estimate. This figure represents the average benefit for society, over a ten-year-period, of preventing an individual from contracting occupational asthma in 2001.
34. Given the number of new cases, and the estimated cost of each case (taken as a point estimate), this suggests that the total costs to society of the new cases of occupational asthma that we would expect to appear over the ten years from 2001 lies between £579 million and £1,159 million in 2001 values. In addition, the proposals can be expected to mitigate existing cases. We make no explicit allowance for this further potential benefit.
35. The ACoP will not introduce any new legal requirements. Strictly there should be no cost borne by employers as a result of the proposed ACoP because they should already be compliant with COSHH. However, some employers may find their reasonable interpretation of COSHH does not quite reach the clarified level. The employer must not conduct work likely to expose workers to substances hazardous to health, unless they make a suitable and sufficient assessment of the associated health risks.
36. The COSHH assessment must be reviewed regularly and when:
37. Where substances which cause occupational asthma may occur, the ACoP highlights the following requirements of COSHH assessments:
38. A wide range of industries encounter substances which can cause occupational asthma. These include agriculture; food manufacture; electronics; metal-making and treating; textiles; plastics processing; chemical processing; cover and paint spraying; other painting; woodworking; research; and education. According to the Census of Employment (1995) there are approximately 227,000 employing businesses in industries that may use such substances. The numbers in each group are detailed at Table 1.
| Industry | Number of employers |
|---|---|
| Agriculture | 70,000 |
| Manufacture of metal and metal products | 41,000 |
| Chemicals | 4,000 |
| Electrical and electronic engineering (excluding medical, precision and optical instruments) | 10,000 |
| Food, drink and tobacco | 37,000 |
| Textiles | 15,000 |
| Timber and woodworking | 30,000 |
| Repair of consumer goods and vehicles | 15,000 |
| Research | 2,000 |
| Medical, health and veterinary services | 3,000 |
| Total | 227,000 |
39. Many of these firms may not actually use substances which cause occupational asthma, and are not affected. Based on the evaluation of COSHH detailed below, we assume around 35,000 employers (about one-sixth of all employers) will re-examine their COSHH assessments to establish whether it adequately addresses the risks of occupational asthma. For the majority of firms this will be the only cost associated with the new ACoP.
40. In an evaluation of COSHH (c1991) inspectors found that, of premises using hazardous substances, 62% had already undertaken assessments that were generally suitable and sufficient, while a further 11% went beyond this. 27% were less than suitable and sufficient. Based on current practice, we expect around a quarter of relevant employers will find their assessments need significant enhancing when re-addressing the risk of occupational asthma.
41. The median cost of preparing full COSHH assessments was found to be around £3,000 per firm in 1992, although one-third spent less than £1,000. With respect to reviewing these assessments in the light of the proposed ACoP, we expect that in perhaps 90% of cases the extra work should take no more than 30 minutes of junior management level time at £20 per hour, a total cost of £10. The other 10% may have more significant costs, for instance using outside specialist advice. Even so, we believe the cost for this 10% of firms is unlikely to exceed £500 per firm in 2001 values. The average cost for the 35,000 firms who may extend their assessments should be around £60. Therefore we estimate a total one-off cost of around £2.0 million.
42. There will be a small recurring cost. All firms must keep their assessments up-to-date, taking particular account their health-surveillance results, meanwhile new firms will be carrying out their first assessments. We allow one-tenth of the total initial cost, or around £200,000 a year, for updating and revising assessments.
43. As a result of their assessments some firms will incur additional expenditure on: control, monitoring, and health-surveillance measures; and possible new personnel procedures to identify employees at particular risk.
44. The COSHH evaluation found that half of all firms who implemented control measures incurred costs of between £0 and £1,000, and some 30% had incurred significant expenditure of more than £10,000. In most cases of substantial new expenditure the existing control level was deemed more than adequate. Only 13% of firms had less than adequate control levels.
45. Expenditure on additional control measures relating to occupational asthma should be small, as further expensive engineering controls are unlikely. Improved control could take the form of modified working practices, such as using protective clothing when dealing with spillages.
46. We assume that 10% of the 35,000 employers identified in Table 1 decide to implement new control measures as a result of the proposed ACoP. In terms of the amount spent, we assume that of these 10% of all employers potentially affected by the ACoP, half spend £500 and half are larger, or specialist, employers who spend a total of £5,000. This would suggest a total recurring cost of:
[(10% * ½ * £500) plus (10% * ½ *£5,000)] * 35,000 firms = £9.6 million
47. Finally, some employers may strengthen their surveillance arrangements, although most firms will already have suitable arrangements for monitoring and recording sickness absence in place. The frequency and nature of surveillance is related to the degree of risk of exposed workers. To illustrate costs, we assume that 10% of the 400,000 workers in the 35,000 employers who reexamine their COSHH assessments are newly subject to a twice yearly `check up' taking on average one half hour, at a cost per hour of around £50 including lost productivity and medical staff time. Total surveillance costs for the estimated 40,000 employees subject to enhanced surveillance would then be around £2m per year. We expect any additional record-keeping costs to be small.
48. Over a 10-year-period, the discounted present value of the costs is expected to come to £89 million in 2001 values, calculated in Table 2 below.
49. These are all policy costs. There are no implementation costs associated with this proposal.
| One-off costs | Recurring costs (10 year discounted totals) | |
|---|---|---|
| Additional assessment costs | 2 | 1.5 |
| Additional control | 0 | 71 |
| Additional information & health surveillance costs | 0 | 15 |
| Total net present value | 2 | 87 |
| Yr 1 |
Yr 2 |
Yr 3 |
Yr 4 |
Yr 5 |
Yr 6 |
Yr 7 |
Yr 8 |
Yr 9 |
Yr 10 |
| 13.8 | 11.8 | 11.8 | 11.8 | 11.8 | 11.8 | 11.8 | 11.8 | 11.8 | 11.8 |
50. The total benefit of preventing all new cases of occupational asthma over the next ten years are estimated at between 579 million and £1,159 million in present terms. Against this, the additional costs of the proposed ACoP are estimated at £89 million in present terms. We anticipate the proposed measures will bring a substantial fall in the yearly incidence of occupational asthma within three years. However, increased awareness is likely to result in increased reporting of cases in the first instance. Also, there will be some delay before realising the benefits relating, as employers will need time to act on the measures.
51. Nevertheless, if approximately 113 to 450 cases are prevented by the introduction of the ACoP, then discounted benefits would be equal to discounted costs. That is, a reduction in the incidence of new cases over ten years of between 8% to 15%. Even though we expect the ACoP to impact on only a proportion of employers not fully compliant with COSHH, we consider it likely that the benefits of the proposed ACoP will more than balance the associated cost provided that employers are spurred on to act on the guidance presented in the new ACoP. HSC future awareness and enforcement campaigns will seek to achieve this.
52. Based on previous experience of implementing controls on hazardous substances, we do not expect any disproportionate impact on SMEs from the requirements themselves. However, there is some evidence that compliance with existing controls has tended to be lower in small firms, and so we would expect the potential benefits and associated costs to be more concentrated among SMEs.
53. Five small firms (with less than 50 employees) were contacted. Three in the agriculture sector and two in vehicle repairs. The smallest firm employed just 2 people, the largest employed 27 people.
54. All five firms reported that they carry out COSHH assessments. The level of detail varied from thorough assessments with particular health checks for workers with preexisting asthma, to more general assessments. The smallest firm works with a large number of 'substances hazardous to health', but reported a high level of compliance with the existing COSHH Regulations.
55. On PPE, most firms reported that they had sufficient control measures in place to comply with the asthma ACoP. One firm from the agricultural sector indicated that their workers are no longer involved in crop spraying as this activity is now contracted out. However, some of the workers still operate within a 'dusty' environment.
56. Only two firms claimed that they would need to reexamine their COSHH assessment to ensure that it addresses the risk of occupational asthma. In both cases this would be carried out by the owner/manager of the business. One of the firms estimated that it would take approximately ½ an hour to complete; the other firm estimated it would take 1 hour.
57. In terms of implementing new control measures, three firms reported that they already had adequate measures in place. The other two firms were unsure whether they would need to implement new measures and were unable to estimate, if any, what costs they would face.
58. To conclude, it seems that the proposed ACoP will not have a disproportionate impact on small firms as far costs are concerned. There are no additional costs imposed from extending their compliance with the existing COSHH Regulations to cover the provisions in the ACoP.
59. As far as possible current compliance levels for the components of the proposal have been taken into account. These are made explicit in the assumptions sections. It is not known to what extent compliance will be changed as a result of the proposal, but it is envisaged that reducing noise at source is going to be a gradual process and that, therefore, compliance will improve over the years.
60. Nevertheless, compliance with the 1989 Regulations is by no means universal, and it is likely that compliance at the lower levels proposed would prove extremely difficult in some areas. For example, it has been suggested (see Impact on Small Firms above) that workers may be less compliant with wearing more 'heavy duty' PPE.
61. There are no direct environmental effects of the proposals, other than the health benefits detailed above. Where local ventilation systems are used to disperse substances causing occupational asthma, these have a negligible effect on the environment.
62. The ACoP will be enforced by HSE inspectors and local authority Environmental Health Officers. They have powers under existing legislation to serve improvement notices, prohibition notices or to prosecute for a breach of the COSHH Regulations. The maximum fine in a magistrates court is £5,000 (or £20,000 for a breach of sections 2 to 6 of the Health and Safety at Work etc. Act) but a crown court may impose unlimited fines.
63. HSE plans to monitor the effect of the ACoP and related activities for its impact on the numbers of cases of occupational asthma and for any improvement in the quality of control measures at premises visited by inspectors and LA officers. An evaluation will compare the three year average incidence of occupational asthma with that three years after the ACoP comes into effect. This will enable a review of the effectiveness of the proposed arrangements in case further tightening of the legislative framework is necessary.
Andrew Maxey
HDC Workplace Risk Management Unit
Health and Safety Executive
Rose Court
2 Southwark Bridge
London
SE1 9HSTel: 020 7717 6369
Fax: 020 7717 6190
Email: andrew.maxey@hse.gsi.gov.uk
[1] "Health, Employment and Financial Outcomes in Workers with Occupational Asthma", Gannon, Weir et al, British Journal of Industrial Medicine 1993.
[2] We are not clear whether the survey bases the loss of income data on individuals' gross, or net earnings. If it is net earnings, then a scaling factor would be necessary to derive gross earnings, and the income loss would increase.
[3] It is assumed the £3,888 applies to 1992. This is uprated by 33.9% to £5,209 in line with overall earnings growth 1992-2001 (projected). £5,209 is increased by 30% for non-wage costs to give £6,771.
[4] "The Costs to the British Economy of Work Accidents and Work-Related Ill-Health", N.V.Davies and P.Teasdale, 1994, updated 1999.
Created for the HSE website: 21 January 2003