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The real cost of poor health and safety

October 22nd, 2013

By Alex Green, CEO of HANDS HQ, an online tool for creating construction risk assessments and method statements in minutes. Readers of UK Construction Blog can use the code UKCONSTRUCTION for a free month trial.

Looking at data alone, you’d think that construction is becoming a safer industry every year. HSE statistics show that the rate of fatal injury has more than halved over the last 20 years, and employers have unprecedented online resources to help manage health and safety.

But the risks to workers’ health and wellbeing aren’t going away as quickly.

UK construction workers remain nearly four times more likely to be killed at work than the average worker, while an estimated 70,000 builders are suffering from ill health as a result of their work. Falls from height and illnesses caused by construction dust are only two of the many problems caused by lacking health and safety practices.

It’s clear that there’s a problem with regulation infringements, and HSE are taking hardline measures to solve it.

“If we find evidence that workers are being unnecessarily and irresponsibly put at risk we will not hesitate to take robust action,’ said Heather Bryant, HSE Chief Inspector of Construction, last month. “Companies who deliberately cut corners can expect to feel the full weight of the law.”

In September, HSE inspectors carried out unannounced site checks across the country to ensure that high risk jobs like work at height were being managed sufficiently. Although HSE are still compiling data for the month’s inspections, they recently announced that just under 50% of sites had failed.

Compare this to March’s results, where 1 in 5 inspections resulted in enforcement action, and you can see the widespread scale of insufficient risk management.

The implications of a failed inspection or negligence when an accident occurs are expensive, time-consuming and can ruin a business’s reputation. The cost to construction businesses and tradesmen can range from the following:

Fee for Intervention (FFI)

Under The Health and Safety (Fees) Regulations 2012, those who break health and safety laws are also liable for recovery of HSE’s related costs, including inspection, investigation and taking enforcement action, known as Fee for Intervention. This is on top of any civil law cost that could be brought forward if an accident occurs onsite.

Conviction costs

Companies found to be negligent once accident occurs are obligated to pay civil law costs, with the average fine per conviction being £25,381. According to HSE data, construction has the highest number of convicted cases out of entire UK employment sector.

Post legal proceedings

Businesses can also expect a heavy increase in insurance premiums if convicted. A HANDS HQ customer said prior to signing up, he was sued by a sub-contractor for £32,000 because of an accident in which the sub-contractor was injured, despite the customer not being at fault. His insurance premiums skyrocketed from £850 to £4,000 a year. His insurance company stated this could have been avoidable if the customer had completed a risk assessment and method statement showing he had carried out his due diligence.

SMEs drowning in paper work and costs of compliance

Whether trying to comply internally or using an outside consultant, the compliance process can be expensive. A small business in the UK now spends almost one day a month (7.2 hours) complying with H&S regulations and spends on average £4,136 per year and one-man day per month on compliance. A medium size company is spending upwards of £27,000 per year and over a day on their compliance (Taylor, C. [2010]. Health and Safety Reducing the burden. Policy Exchange. London: Policy Exchange.).

Cutting corners with health and safety comes at a huge cost but compliance doesn’t need to be painful.

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