Gas Transportation Charging Review Group

Minutes of the Meeting held on 8 October 2002


Dr Neil Johnson Chair, HSE

Industry members

Mr P Clark, AIPGT;
Mr D Childerhouse, AIPGT.
Mr C Musgrave, Transco; (by conference phone)

HSE members;

Mr T Small, HID;
Mr M Reyland, PEFD
Miss J Solomon, PEFD
Dr B Fullam, HID
Mr K McFadyen, HID, Secretary;

1. Welcome and introduction

The Chairman welcomed everyone to the meeting. Tim Small was replacing Frank Perkins; Jane Soloman was attending for Bill Tomkins. Apologies had been received from John Taylor, UNISON and Mark Platt who has replaced Sylvia Channon as the CBI representative.

2. Minutes of the meeting held on 9 April 2002

The minutes were agreed.

3. Matters arising

Min 3: The Gas Safety Assessment Manual has been published on the Internet and members informed.

Min 5: Mr Musgrave's query regarding duty holders being unfamiliar with charging would be taken up with Deloitte & Touche at a meeting with them after this one. Action: PEFD

4. Progress on the evaluation of charging

Paper GCRG 2002/6 had been circulated prior to the meeting. This indicated that evaluation was reaching its final stages. The last three reports (Gas Transportation, Offshore and Railways) had been received and circulated as appropriate. There was nothing in any of the reports to indicate a fundamental change to the charging schemes was necessary.

Deloitte & Touche are producing a consolidated report drawing together common themes from each of the reports. The key points to be made are that HSE needs to take action to keep its rates down, and to take action on operational issues raised by the review. Deloitte & Touche will be making a presentation to HSE senior operational managers on the latter point on 11 October.

The findings of the last reports will be presented to the HSC in early December, who will write to Ministers with their conclusions. Once cleared with Ministers these reports will be published on the Internet.

5. Charging efficiency project

This project had arisen from the evaluation report on reasonableness of charge out rates and is aimed at improving the productivity and efficiency of staff and operations. The reasonableness report showed a variation of rates across the six organisations compared in the evaluation, with HSE's rates higher than the others.

To reduce rates HSE will consider ways of increasing the proportion of productive days, increasing the productivity of individuals, reviewing the mix of support and technical staff and reducing aspects of the indirect cost base.

The terms of reference of the project are:

The scope of the project covers the charging regimes for COMAH, offshore, railways, gas transportation and nuclear. There is a project board chaired by a member of the HSE Board, with members of senior staff from various divisions plus two external members. The project team consists of three staff from HID and one external member.

The plan is to collect data from the five regimes, the Environment Agency and the external comparators used by Deloitte & Touche. The collection of this data and its analysis is due to be completed by mid-December. There will then be a report produced, in conjunction with those doing the work, on cost reduction and productivity measures, with a timetable for implementation.

6. Bearing down on bureaucracy

There are projects already underway in rail, COMAH, gas and field operations to increase the productivity of front line inspection staff. It is planned to tap into these projects to gain data for the efficiency project. These projects arose because studies showed that the amount of contact time recorded by inspectors was low and reducing. This was considered to be related to the administrative burden placed on front line staff, which was diverting them from the planned number of days available for front line work.

7. Proposed charge-out rates for 2003/04

A letter had been sent to members indicating that the rate for 2003/04 would be unchanged. It was explained that the outturn rate for 2001/02 was £103 against the £101 charged up to 19 August 2001 and £107 charged thereafter, and that HSE did not fully recover its costs. Using the outturn rate plus an element for inflation allowed the current rate of £110 to be pegged.

Industry asked if data on the amount of time spent on each activity could be provided as in the past. HSE agreed to provide the 2001/02 data and would aim to provide the 2002/03 by June 2003. Action: HSE

Industry also asked whether the time spent on safety case assessment was the best use of resources, as opposed to, say, inspection. The time spent on assessment was being reviewed for offshore, but GSMR has a much narrower scope than that and other regimes. Assessment work is reactive to the number of cases or material changes submitted. It is industry that decides whether it is making a material change and HSE has to respond accordingly.

8. Draft report to the ICRG

The draft report (GCRG 2002/7) had been circulated prior to the meeting. It was agreed that it could go forward as drafted.

9. Any other business

Industry felt that the guidance on charging for investigation work was confusing. HSE said that investigative work directed at the GSMR responsibility was chargeable, but agreed that the guide was unclear. Paragraphs 3.1 - 3.4 of Annex A in the guide would be reviewed and revised. Members' comments on the draft revision would be sought before the Internet version was changed. Action: HSE

10. Date of next meeting

The date of the next meeting was provisionally set for 9 October 2003.

Updated 2008-12-05