HSE has missed its target income for the current financial year, only squeezing just under an extra million in its commercial revenue, latest accounts reveal.
The figures are in the HSE annual report and accounts 2016/17 which sets out HSE’s performance against its financial objectives for the year. It also shows how against this financial backdrop, what HSE has been able to do with its income (and savings made) to fulfil its responsibilities as independent regulator and ‘prime mover’ in the health and safety system.
Income ‘lower than planned’
The figures for the last financial year, until 31 March, show that, despite incrementally swingeing cuts in government funding until 2020, growth has been disappointing.
Total income for the last financial year was £90.8m, compared with HSE’s target in the Business Plan for 2016/17 which was £94m.
Commercial income – made from sales of publications, HSL external customers and science and administrative support to ONR – was £15.5m in 2016/17 up from £14.6m in 2015/16.
Moving towards ‘full-cost recovery’ for HSE’s fees and charges regime (FFI) is a main element of HSE’s financial strategy to live within the reduced government funding.
However, despite the Treasury raising the cap for FFI income – the amount HSE can retain before having to pay the exchequer – to £17 million (up from £11 million) the report shows there was only a small increase.
HSE made £14.9m from FFI in 2016-17, costs incurred were £16.6m – a deficit of £1.7m.
Last year in 2015-16 FFI made £14.7m but cost £17.4m – a deficit of £2.7m, so there is some improvement.
Failure to grow income is a risk, identifies the report. It could ‘mean that we are unable to preserve and maintain HSE’s philosophy, capacity and capability as an effective risk-based regulator.’
This because, as the Business Plan last year revealed, tax-payer funded income will fall to £135.6m in 2017/18 down from £140m this year to £128.4m in 2018/19 and finally £123.4m in 2019/20.
The report puts by way of explanation that there was ‘continued growth in our commercial income although market conditions have meant the increase was lower than originally planned.’
Prosecutions down, improvement notices up
Performance-wise for the year, the report reveals that prosecutions are down dramatically. Yet the number of inspections remain on a level with previous recent years (circa 20,000, although figures are provisional) and there have been more improvement notices served.
The number of legal proceedings undertaken by HSE and the COPFS in Scotland was 547 in 2016/17.
It compares with 696 prosecutions in 2015/16 – a drop of 27 per cent - and is the lowest it’s been in the five year period (since 2012, when there were 605 prosecutions).
It is interesting to observe also that, stretching back further, there were 1,500 prosecutions (in 1989/90).
The report says regulatory action prevented harm and secured improved management of serious risk in over 9,000 workplaces inspected, more than in the last two years (2015/16: 7800; 2014/15: 7200).
There were increases in other areas too. HSE served over 6,700 improvement notices and 2,850 prohibition notices, an increase of 18 per cent on the previous year (2015/16). Over a third of the improvement notices were for health issues.
This year was also a challenge for HSE to make savings as well as grow income. The year 2016/17 was the first in which the Spending Review 2015 applied requiring HSE to make savings of £30 million by 2019/20.
To meet this specific challenge, HSE has been continuing to improve ‘efficiency and effectiveness of our delivery’ by investing in new IT and digital comms and also making savings on staff and running costs.
It made £700,000 savings in mobile phones and 48 staff took voluntary redundancy last year.
We are ‘continuing to live within our means’, say Chair Martin Temple and Chief Executive Richard Judge: “Investing in IT, digital and science enable us to be even more productive and effective."
New sources of funding abroad
Investments also include reaching into overseas territory by providing other government agencies products and services that support HSE’s overall purpose of preventing work related ill health, injuries and death.
The report explains for example how HSE last year provided technical advice to the Colombian government. A particular focus has been on its implementation of the Globally Harmonised System of Classification and Labelling of Chemicals, it says.
HSE is also continuing work with Singapore (pictured), providing its government technical advice used for risk assessment guidelines for major hazards in a country with a high density of major hazard installations.
In the summary statement, Temple and Judge conclude: “This annual report reflects many achievements through the year, including targeting our inspections to improve risk management and setting our future approach to tackling the key issues in many of Britain’s leading industries.
“The health and safety system in Great Britain is well established. Finding new ways to improve and better manage workplace risks is not easy, but these achievements show we can. We look to the future with confidence.”
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