Review of Löfstedt report on health and safety regulation

The Government's independent review of health and safety regulation has turned out to be precisely that, believes Howard Fidderman.

Nine months after the Government announced an independent review of the UK's health and safety regulations, Professor Ragnar Löfstedt has published his report (PDF format, 781K) (on the Department for Work and Pensions (DWP) website). Anyone expecting a diatribe about "health and safety gone mad" and the "compensation culture" would do better to seek solace in Lord Young's October 2010 report, Common sense. Common safety. Löfstedt's report is everything Lord Young's review was not: it is thoughtful, driven by evidence, and balanced.

In short, Löfstedt finds no evidence to support "radically altering or stripping back current health and safety regulation". The regulations themselves are broadly "broadly fit for purpose"; the concept of reasonable practicability is appropriate to the legislation; and risk assessments are "fundamental" to a business's management of risk. What problems there are, he concludes, lie not so much with the regulations per se as with their application. And while he does make a "headline" recommendation in the removal of 35% of health and safety legislation through a sector-specific consolidation, the reality is that this will affect only a handful of sectors and a small number of businesses.

True, Löfstedt does find instances of individual sets of regulations that are of "questionable value" and others that are outmoded or duplicated, but the repeals and amendments he recommends will, for the most part, raise few eyebrows. He also acknowledges that the room for reform will often be constrained by the EU origins of the regulations.

The reform that is most likely to be problematic - and that will be permissible within EU law - is the removal from health and safety legislation of self-employed workers whose activities pose no risk of harm. He stops short, however, of an exemption for small firms - even those engaged in low-risk activities - although a relaxation of risk assessment requirements for small firms may resurface at some point. And, most disappointingly, the DWP has watered down Löfstedt's recommendation to tear up the current enforcement split between the HSE and local authorities (LAs) and prioritise inspection on the basis of risk across the board under the direction of the HSE; instead, the DWP offers a greater role for the HSE but not the power to change this historical anachronism.

The Löfstedt report is not, however, a radical document. Few of the 26 recommendations - which Löfstedt wants implemented by April 2015 and, in some cases, earlier - will cause significant upheaval; most merely fine-tune the UK's regulatory system. What they will not do is significantly reduce the toll of workplace injuries and, particularly, ill health. This is not Löfstedt's fault - it was never going to happen under the terms of reference. But nor are the recommendations what the employment minister, Chris Grayling, would have hoped for when he launched the report in March 2011, and it is no surprise that, in welcoming the report, Grayling and the DWP should repeat the same myths and mantras that Löfstedt rejects and then, in their implementation plans, let slip that they will introduce a new right to challenge inspectors' decisions from 1 January 2011. The DWP had no further details on this challenge, however, as HSB went to press.

Closer analysis of the DWP's response (PDF format, 108K) (external website), which it published alongside the Löfstedt report on 28 November 2011, shows that while the DWP claims that it has accepted Löfstedt's recommendations, it does not always fully embrace the detail, particularly around enforcement. At other points, particularly where Löfstedt implicitly disputes Young's findings and recommendations, the DWP merely glosses over the professor's recommendations. The DWP may have "spun" the report as justification of its stance on health and safety; the reality is that it is anything but.

The Löfstedt review

The DWP announced the review in its March 2011 statement "Good health and safety, Good for everyone". This effectively built on the Young Review and also announced that the HSE would recoup the costs of its formal enforcement activity, alongside a one-third reduction in proactive health and safety inspections. Two months later, on 20 May 2011, Löfstedt, who is the director of the King's Centre for Risk Management at King's College London, published the DWP-agreed terms of reference together with a call for evidence (see box 1). He received 250 written responses and supplemented these views through meetings with business representatives and several visits with inspectors that "provided a crucial insight into how the regulations are applied by employers and the regulator, and the difficulties that employers can have with understanding and implementing the current regulations". He was "supported and challenged" by a five-member advisory panel of three MPs plus an employer and employee representative.

Löfstedt also takes up some of the comments made up to 28 July 2011 in response to the Red Tape Challenge, a cross-government initiative that invited businesses and the public to comment on all legislation - including health and safety - that affects business. The HSE is considering comments made after that date.

The "guiding principle" for the review, says Löfstedt, is that regulation should be based on risk and not hazard. During the review, it also became "apparent that there is relatively little robust independent peer-reviewed evidence available to inform the issues under investigation, beyond government-commissioned reviews and evaluations".

Regulation is "significantly beneficial"

Löfstedt addresses head-on the complaints of organisations that regulatory compliance is costly. He rehearses the well-known arguments about costs - based on surveys by organisations such as the Forum of Private Business and the British Chambers of Commerce - and then notes the benefits of avoiding injury and ill health. There is, he says, little peer-reviewed research into the effectiveness of legislation in reducing injuries, even though "the regulations are broadly accepted to have been an important contributory factor, with the evidence showing that legislation is the primary driver for organisations to initiate changes to improve management of health and safety".

There are also "knock-on implications for the relationship between health and safety regulation and business growth, particularly if an increase in the health of employees makes them more productive and improves the quality of work, or if equipment and the working environment are optimised to the needs of the working process that leads to higher productivity and better quality". These benefits may be "hidden" from business because of the externalisation of the costs, ie they are borne mainly by the individual and the state, but not by the employer. Added to this is the fact that while employers must meet the costs of regulation immediately, the benefits of compliance may not be felt for years (or even, although he does not say this, at all, because employers rarely notice or quantify the absence of injury as a benefit).

Overall, the evidence "suggests that whilst the costs associated with compliance can be significant, current health and safety regulation plays a significantly beneficial role. Indeed, the vast majority of employers and employer organisations acknowledged the importance of health and safety regulation in their responses to the call for evidence and felt that, in general, the regulations were broadly fit for purpose. During the course of my review, I have neither seen nor heard any evidence to suggest that there is a case for radically altering or stripping back current health and safety regulation."

Nevertheless, he identifies issues that need to be addressed, including examples of businesses that have to spend considerable time and money on health and safety activities that are of "questionable value". But, "in general, the problem lies less with the regulations themselves and more with the way they are applied" - this can be through third parties promoting actions beyond the requirements, or a lack of clarity in the regulations, or their "sheer number".

Avoiding a drift back beyond Robens

The 1972 Robens report, which spawned the HSW Act 1974 and the regulatory framework we have today, concluded: the "first and perhaps most fundamental defect of the statutory system is simply that there is too much law" and that this could be "counterproductive". Robens identified nine main groups of statutes and 500 statutory instruments that governed health and safety, many of which were highly prescriptive and industry-specific. Most of this legislation was progressively replaced in the ensuing years by regulations issued under the HSW Act that were risk-based and goal-setting, supported by Approved Codes of Practice (ACoPs) and guidance on how to secure the goals. Löfstedt claims, however, that the post-1974 period has seen the regulatory system "pulled in a number of different directions", with industry-specific legislation in response to incidents and the implementation of EU Directives.

The situation led to a 1994 review by the then Health and Safety Commission, which suggested the repeal of seven of the remaining 28 Acts, and 100 of 367 sets of Regulations (although much of this legislation had remained on the statute book for no particular reason, and certainly not because it was used). There have been numerous other reviews by bodies such as the Better Regulation Executive, the Commons Work and Pensions Select Committee, and, most notoriously, by Lord Young.

Löfstedt claims that not all of these reviews focused on legislation and that, as a result, there is now a "need to check that we are not slowly drifting back towards a system that Lord Robens set about replacing". Later in his report, however, Löfstedt accepts there is 46% less health and safety regulation than 35 years ago and 37% less than 15 years ago but, despite this, some of those taking part in the review stated that "the sheer number of regulations, as much as any particular regulation, causes problems for businesses".

Sector-specific consolidation

Löfstedt therefore recommends the HSE to undertake a programme of sector-specific consolidations, to be completed by April 2015. The review should be "given priority and the resources necessary to ensure there are no unintended consequences". He believes that the consolidation will result in a 35% reduction in the number of regulations. This would produce simplified sectoral regulations that are up to date and that will help businesses to comply with the legislation. He is equally emphatic that any consolidation "should not in any way reduce the health and safety protection". The legislation covers 76 Acts, Regulations and Orders affecting mines, explosives, petroleum, biocidal products and genetically modified organisms (see box 2).

The DWP accepts the recommendation and adds that, together with ongoing HSE work, this "will reduce the number of health and safety regulations by more than 50% without reducing the protection offered to employees and the public". It further claims that even businesses that are not engaged in high-risk activities "have to comply with a minimum of 13 different sets of general regulations". What it does not say, however, is that the consolidation of the 76 pieces of legislation identified by Löfstedt will affect a very small number of employers only and will not affect this baker's dozen minimum in any way. It is also important to note that the 35% (and 50%) refers to the number of statutes and not the overall so-called legislative "burden", ie businesses are not receiving a 35% cut in their statutory duties.

A general consolidation?

Moving on from sector-specific legislation, Löfstedt entertains the notion of a further consolidation of the core sets of Regulations that apply to the majority of workplaces. This might be achieved in one or more of four ways:

• consolidate all the regulations into one overarching set of regulations (as recommended by Lord Young);
• merge sets of regulations that cover related topics;
• bring together regulations that contain common provisions (for example, the requirement to carry out a risk assessment or provide information and training); and
• consolidate the sets of regulations into a smaller number according to theme (for example those that relate to general management issues or to specific hazards).

He finds little evidence to allow consideration of which approach would best deliver the desired outcome, although he appears disinclined to pursue the first two options. While the responses to the call for evidence returned a "mixed picture", there were a number that were "not in favour of a major consolidation" as recommended by Young. The drawbacks include familiarisation costs, the fact that businesses would have to consider duties that do not apply to them (a point that is similar to that made in HSB at the time of Lord Young's report that a single set of regulations would be an enormous tome through which employers would find it impossible to wade), as well as the time and resources that would be required for the HSE to conduct such an exercise. And the second option would not reduce the number of sets of regulations to any significant extent but would still incur familiarisation costs.

Löfstedt does, however, see advantages in consolidating the sets of regulations "into a few sets, linked by common themes or principles". This, he says, will help businesses understand their duties and reduce duplication (for example, of risk assessments). He therefore recommends that the HSE commissions research by January 2012 "to help decide if the core set of health and safety regulations could be consolidated in such a way that would provide clarity and savings for businesses".

Somewhat perplexingly, he adds that: "Any consolidation would not reduce health and safety outcomes because there would be no change in the duties." He may, however, be underestimating the effect of a successful consolidation, one of the main outcomes of which should be that employers would be clearer about what they had to do, and so would be more likely to do it, thereby improving health and safety outcomes (although the improvements would not be significant given the absence of any recommendations that would tackle the real issues in health and safety).

Löfstedt also recommends distinguishing on the HSE's website legislation that affects business from that which addresses administrative arrangements and repeals of earlier legislation (see box 3). Regardless of any core consolidation, however, Löfstedt is emphatic that the "clear priority is to progress the sector-specific consolidation in parallel with working with the EU to ensure a risk-based approach is taken to the review of occupational safety and health regulations".

Reviewing the regulations

Löfstedt advises he was not able within the review timeframe to "undertake a systematic review of each and every regulation"; instead, he looked at the scope and application of "the framework as a whole from a risk- and evidence-base perspective" and then focused on regulations where he had received evidence that they placed a "burden" on business without improving health and safety. He sets out by considering four sets of regulations where there is a need to clarify regulatory requirements and remove unnecessary duties.

First, Löfstedt recommends the revocation of the Notification of Tower Cranes Regulations 2010. These, he says, have "little value", with the HSE's impact assessment (IA) unable to quantify any benefits but a cost to industry of £203,000 over 10 years. The IA concluded that the register, which followed several high-profile tower crane accidents, was not expected to reduce injuries or ill health and that the main benefit would "be an increase in public assurance". Löfstedt states the HSE should now explore alternative ways of reassuring the public.

Löfstedt next recommends amendment of the Health and Safety (First Aid) Regulations 1981 to remove the requirement for the HSE to approve those who provide first-aid training and qualifications. The requirement, he believes, goes beyond the EU legislation and has "little justification", while allowing businesses to pick their own training providers should allow them greater flexibility to choose what is right for their workplace, and possibly reduce costs, so long as the standards are met. The change should be supported by revised guidance on what provision is suitable for different workplaces.

Löfstedt's other two recommendations are little more than exhortations to the HSE to get on with ongoing and planned work. He recommends the HSE complete the evaluation of the effectiveness of the Construction (Design and Management) Regulations 2007 and ACoP by April 2012 to ensure the duties are expressed clearly, bureaucracy is reduced and there is guidance for small projects. The HSE has, in fact, completed the evaluation but had delayed submitting a paper to its board in order to await Löfstedt's report. Löfstedt notes, too, that there are issues around competence in the construction sector that need addressing and welcomes the Safety Schemes in Procurement initiative, which allows mutual recognition between health and safety prequalification schemes.

RIDDOR overhaul by end of 2013

Finally, Löfstedt advises the HSE to complete its fundamental review of the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR) by the end of 2013; the DWP's response states that it will ask the HSE to do this. Although Young recommended the review, the HSE delayed the start until a year after it had implemented a second Young recommendation on RIDDOR - the replacement of the duty to report injuries that result in over three days off work with one of over seven days. In effect, this meant that the earliest the HSE would start the review would have been April 2013. The HSE's problem is that, by "completion" of the review, Löfstedt means "RIDDOR and its associated guidance should be amended by the end of 2013 to provide clarity for businesses on how to comply with the requirements."

While Löfstedt supports the over-seven-days change, he emphasises why the more fundamental review is needed: "The aim should be to reduce the ambiguity over the reporting requirements for businesses, particularly in relation to incidents involving members of the public, and improve the quality of information collected." Löfstedt notes concerns that the different categories of reportable accident are "unnecessarily complicated" and that it is "time consuming for organisations to determine if ... incidents should be reported and that this uncertainty creates inconsistency in reporting between organisations" - particularly where members of the public are involved. Such inconsistency and under-reporting limits RIDDOR's effectiveness "in providing useful statistics or indicators for the enforcing authorities and business, and supports a view that the regulations pose an unnecessary burden," concludes Löfstedt.

Löfstedt notes concerns that the introduction of a "fee for intervention" - in which dutyholders will pay the HSE's enforcement costs where they have committed a material failure - will make some dutyholders less willing to report an incident under RIDDOR, thereby exacerbating the current under-reporting rate of 50%. This is because employers that report an incident under RIDDOR are more likely to receive a visit from the HSE or an LA than those that do not.

Trivial misapplications

Löfstedt also looks at some "instances where regulations that were designed to address real risks are being misapplied to cover trivial ones" (see box 4), as well as the revocation of the Construction (Head Protection) Regulations 1989 and of two sets of Regulations amending the Celluloid and Cinematograph Act 1922 Act. This legislation, he believes, is either unnecessary or has been superseded by more recent sets of regulations, although he emphasises that there should be a consultation process first to ensure that no protection is lost. What is more interesting, however, is that he questions the allegations of the misapplication of the legislation to school activities and the emergency services (see box 5).

The DWP accepts the recommendations on all of the individual sets of regulations above, and will ask the HSE to draw up a timetable for carrying out the work, including public consultations. The DWP also warns, however: "Where legislation has originated in the EU, there may be limited scope for making changes, particularly in the short term. When reviewing such regulation the HSE will, however, be asked to ensure that no unnecessary over-implementation has occurred during transposition, and that the UK law is as simple and straightforward as possible whilst still meeting EU requirements. In the longer term, the planned [European Commission] review of EU health and safety legislation in 2013 will provide an important opportunity for us to press for a more proportionate approach to regulation in this area."

Fine-tuning the fundamentals

Löfstedt emphasises that the concept of "so far as is reasonably practicable" - which is at the heart of health and safety duties - has a "clear purpose" that "recognises that hazards cannot be eliminated altogether". Where the concept is applied correctly, it "should, by its very nature, ensure that health and safety risks are managed in a proportionate manner and ensure that unnecessary burdens are minimised". But he finds there is "general confusion over what it means in many quarters" - particularly among small businesses that do not have in-house expertise. Such ambiguity is a significant drawback and so he recommends that the HSE "should continue to help businesses understand what is reasonably practicable for specific activities where the evidence demonstrates that they need further advice to comply with the law in a proportionate way". This could include guidance (if necessary) and the sharing of practical examples among businesses engaged in similar activities; he is not, however, recommending any change to the concept itself.

Löfstedt is equally supportive of the concept of risk assessment, stating: "There is no question in my mind, on the basis of the evidence I have seen and heard, that a legal requirement to do a risk assessment is a fundamental step in the appropriate management of risk for any business. It is a vital step that enables them to identify the issues that have the potential to cause harm and that need to be controlled." There is, however, a considerable problem of proportionality in practice, "with many organisations producing or paying for lengthy risk assessments that may not be relevant or help the business manage the real risks". He welcomes the HSE's initiatives such as the online model risk assessments for more than 30 types of workplace and the more recent 10-minute risk assessments for "low-risk" premises that implemented recommendations by Lord Young. He does not, however, make any recommendations on risk assessment, noting only that "more can be done" (see, for example, box 6).

ACoP review

Löfstedt accepts the importance and usefulness of ACoPs in offering an alternative to prescriptive legislation: ACoPs can be amended far more easily than can legislation, thereby accommodating innovation and technical change. ACoPs, he writes, "define what a business needs to do to comply with the law so they have the potential to be a valuable resource, particularly for small and medium-sized enterprises (SMEs), to help reduce uncertainty and over-compliance whilst at the same time giving others the flexibility to comply in other ways."

Despite "overall" support for the principles of ACoPs as "a vital part of the system", many who responded to the call for evidence believed there was room for improvement, including simplification and addressing the "potential for confusion between the elements that are regulation, those that have ACoP status, and what is guidance". Noting that ACoPs are excluded from the HSE's ongoing review of guidance, Löfstedt therefore recommends the HSE review all 53 ACoPs, with the initial phase of the review completed by June 2012 "so businesses have certainty about what is planned and when changes can be anticipated". The review will ensure the ACoPs: are still required; offer an unambiguous guide to what the law requires for specific activities; are up to date; are presented in the most appropriate way for the intended audience; and help define "terms such as 'reasonably practicable' in specific situations to reduce the risks of over-compliance". Particular attention should be paid to the ACoP on the management of health and safety (see box 6). The DWP advises it will ask the HSE to conduct the review to Löfstedt's timetable, acknowledging that this is "a major programme of work". It says nothing, however, about ensuring that the cash-strapped and besieged HSE has sufficient resources to undertake this work (or to implement any of the other recommendations).

Small firms and the self-employed

Small firms and their representatives are among the most vociferous critics of health and safety legislation, and Löfstedt runs through the oft-repeated evidence, including a British Chambers of Commerce (BCC) report (PDF format, 230K) (external website) from May 2011 claiming that one-third of small businesses believe that health and safety regulations are an obstacle to growing their business (the BCC supplied the employers' representative on the panel). Löfstedt goes on to cite the usual litany of "complaints of an overly complex and bureaucratic system which drives SMEs to seek out the services of consultants, who, in turn, can provide advice that is not required by law and provides little or no benefit to workplace health and safety, adding further burdens to business". (He notes that the new Occupational Safety and Health Consultants Register should reduce this problem.)

What is surprising is that he does not question the basis for compiling such "evidence": ask a small firm whether or not the regulatory burden is too much and there can be little doubt about the answer. Furthermore, one of the main sources cited by Löfstedt is a report (PDF format, 470K) (external website) compiled by Vanilla Research in 2008 for the Department of Business Innovation & Skills. This, however, was based on interviews with just 30 small firms and two group discussions. The interesting thing about this report - and Löfstedt doesn't mention it - is that it found: "The perception is that, in theory, full compliance would pose an unreasonable burden on small businesses... However, in practice, they often operate at, say, 80% compliance, which results in health and safety largely not being seen as overly burdensome" (the report's emphases). Businesses did not, said Vanilla Research, find the burden "unreasonable". The desire among small firms, according to its report, was to facilitate compliance with, rather than ease, the regulations (see box 7).

Löfstedt insists that the views of small firms that regulation of large firms is not automatically transferrable to them, and the particular difficulties and costs they face, "need to be treated seriously, with the Government looking to facilitate understanding and compliance". He is equally emphatic that it does not follow that "the legislation itself should be based upon the size of the firm." With many smaller firms operating in higher-risk sectors and more prone to accidents, the evidence "does not support reducing regulatory requirements for smaller firms, and attention should be focused on improving guidance and support". He again cites approvingly the HSE's case study risk assessments, "Health and safety made simple" guidance and online "10-minute" risk assessments.

He does, however, question whether or not a risk assessment is a necessary requirement for some low-risk small businesses, endorsing the 2009 recommendation of the European Commission-instigated Stoiber Group that the smallest firms should be exempted from producing a written risk assessment, even though they would still have to carry it out. (Given that UK law restricts the need to have a written record of the significant findings of the assessment to organisations with five or more employees, the realisation of the Stoiber recommendation would have a limited effect here, although Löfstedt does not mention this.) Löfstedt believes, however, that while the commission is conducting a cost-benefit analysis of such a change, there is greater scope for change for self-employed workers.

Self-employed get their exemption

Löfstedt notes that, in contrast to the UK's implementing regulations, most EU health and safety law does not apply to the self-employed. The approach of individual member states varies, with German law, for example, applying to the self-employed only where their work may affect the safety of others. The inclusion of the self-employed in UK health and safety law is probably the main ingredient of the accusation that past Governments - Conservative, Labour and coalition - have "gold-plated" their implementation of EU legislation since the 1989 Framework Directive. The allegations culminated in the Labour Government commissioning a review by Lord Davidson, who found little substantiating evidence (see box 8). His 2006 report (PDF format, 779K) (on the BIS website) did, nevertheless, recommend the HSE should continue to consult on whether it is appropriate to extend health and safety Directives to the self-employed, and ensure that the benefits justify the costs.

Löfstedt, like Davidson before him, notes that the self-employed can work in sectors and in activities that carry significant risks so that: "A blanket exception could therefore potentially lead to an increase in accidents and ill health amongst not only the self-employed but also others affected by their work activities." In low-risk sectors, said Davidson, "the HSE should consider exempting the self-employed from the legislation." The Young Review subsequently recommended the exemption of the self-employed from risk assessments.

Löfstedt follows Davidson and recommends exempting from health and safety law those self-employed workers (ie those that have no employees) whose work activities pose no potential risk of harm to others. The DWP's response is that it will ask the HSE "to take urgent action" to draw up implementation proposals. It does, however, differ in one respect in that the DWP proves more cautious than Löfstedt, whose recommendation had envisaged the exemption of self-employed people whose work activities placed at risk only themselves (but not others), which would have been undesirable as sick and injured self-employed workers are a cost to their families in terms of lost income and care, and to the state in terms of NHS costs and welfare benefits, not to mention the suffering they themselves would endure. The DWP is clear, however, that: "Where the activities of self-employed people could pose a risk to themselves or others, for example in the building trades, the law will continue to apply."

An undesirable exemption

The effect of Löfstedt's reform is likely to be limited, however. Although he claims the change will benefit one million people, Löfstedt accepts "the actual burden that the regulations currently place upon these self-employed may not be particularly significant" because of existing exceptions in some regulations, which have "a limited prospect" of being enforced. Nevertheless, it "will help reduce the perception that health and safety law is inappropriately applied". The DWP response makes similar points: "In practice, we do not expect enforcement agencies to carry out many visits to self-employed people involved in low-risk activities ... However, it is clear that the fear of inspection and possible prosecution for minor transgressions of the law is a cause of unnecessary concern for the self-employed and - where the individual is carrying out [a] low-risk activity such as office-type work - delivers no real benefit to the wider population."

The exemption is problematic on several fronts: first we have a Government that is proposing to amend legislation because of perception, not reality, and then arguing that it won't make any difference because it is not enforced in any case. Second, and whatever the reassurances the DWP offers, it is difficult to see how this exemption will work in practice - do self-employed workers, for example, fall inside or outside of health and safety law depending on the activity they are undertaking on any particular day? And how can "low-risk" be defined so as to provide the self-employed with the assurance that they will not misunderstand the situation and end up in court in any case - will the definition depend on sector or the particular task? There are also practical difficulties around who is self-employed and who may be employed. We also end up in a situation where the law will apply, or not apply, to people working side by side, depending on whether or not they are defined as self-employed or employed. And finally, Löfstedt has forgotten one the fundamental principles underpinning his review, ie that the application of the legislation should be proportional depending on risk, which is a different approach to repealing the legislation. Cumulatively, these problems could increase confusion and unfairness, rather than simplify the situation.

European limitations

Löfstedt accepts that "in practice the scope for amending health and safety regulation is limited by the extent to which they implement EU Directives": of the 65 new health and safety sets of Regulations introduced between 1998 and 2009, 41 implemented EU requirements. The reality, therefore, is that the UK "needs to focus its attention on working with the EU if it is to improve health and safety regulation and ensure it remains appropriate".

The EU is not, states Löfstedt, a bad thing for health and safety: EU legislation can enhance competitiveness through a level playing field and, somewhat ironically given the complaints of SMEs, "the more prescriptive nature of much ... EU legislation may have helped small businesses [which] often welcome greater certainty over what they are required to do." It has even, he acknowledges, helped improve health and safety. There are problems, however, including a far lower ratio of benefits to costs for EU-originated legislation compared with domestic initiatives. He also highlights two Directives in need of reform - on display screen equipment and artificial optical radiation (AOR) (see box 9).

Improving impact assessments

Löfstedt recognises the improvements that the EU has made in the way it approaches legislation, including an initiative to reduce administrative burdens by 25%, the work of the Stoiber Group and the EU Impact Assessment Board (IAB). Given only a small proportion of EU proposals have IAs, however, he believes - but does not formally recommend - that all proposed EU legislation that has a perceived cost to society above €100 million should go through an automatic regulatory IA. The IAs themselves are in need of improvement too: they should have a "strict scientific peer review"; they could consider in greater detail the impact on individual states; and the drafters of a Directive should not compile its IA.

He therefore recommends "that the Government works more closely with the commission and others, particularly during the planned review in 2013, to ensure that both new and existing EU health and safety legislation is risk-based and evidence-based". (The AOR Directive, he claims, is an example of hazard-based legislation.)

Löfstedt also has issues with the process whereby employers and employees can reach an agreement through social dialogue and then request that it becomes a Directive. The Council of Ministers is allowed only to agree or refuse to implement the agreement; it cannot amend it. Once approved, member states must then implement the requirements in the same way as for any other Directive. Löfstedt therefore recommends the Government works with the European Commission to introduce greater clarity to, and raise awareness of, social partner agreements, and also ensure that IAs are produced for agreements before they are adopted. There has, however, been just one instance of a health and safety agreement turning into a Directive - the prevention of sharps injuries in the healthcare sector.

DWP cautious on EU reforms

The DWP advises that the Government has "done much", but needs "to do more", to tackle the "burden" of EU legislation. It will continue to work closely with the other member states and the European Commission "to deliver a more proportionate, risk-based approach to health and safety, for example through the proposed 2013 review, that better meets the needs of employers, employees and the public across Europe".

The DWP agrees that there should be IAs for all social partner agreements. It points out that all legislative proposals with clearly identifiable economic impacts are already required to have IAs. Although it believes that "having an absolute cost baseline for impact assessments would be helpful", it also notes that IAs have been carried out for proposals below the €100 million mark.

In terms of the independence of the IA, the DWP believes there are "advantages and disadvantages to having [the] IA carried out by those who drafted the regulation". In practice, the experts who lead on a particular policy "are the only ones with the in-depth knowledge of the issues to be able to properly assess the full range of implications. Carrying out the IA should also act as a useful discipline in policy-making, helping to embed the sort of culture change where policy-makers properly consider the evidence and the impacts of the regulatory change they propose." At the same time, the DWP accepts there is a need for an independent check, as there now is in the UK through the Regulatory Policy Committee. Although the commission's IAB "goes some way" towards this, its members are drawn from the commission and the system "would undoubtedly benefit from a stronger and more independent board and this is something we have lobbied for in the past". And, in terms of the parliamentary committee, the DWP says it welcomes parliament's summer 2011 announcement that it would create its own IA unit.

Enforcement split reopens

Löfstedt observes that a full consideration of enforcement is beyond the scope of the review and has in any case been considered in detail in Philip Hampton's 2006 report, "Reducing administrative burdens: Effective inspection and enforcement". The evidence, he says, suggests:

• "businesses can benefit from and value inspections, with SMEs welcoming the constructive, reasonable advice and guidance that ... can ... help them improve health and safety in the workplace. Nearly nine out of 10 employers [that] have had contact with HSE see it as a 'helpful' organisation";
• "enforcement action can be particularly helpful when the regulations themselves are broadly defined and allow for discretion, as is the case with health and safety regulation"; and
• "inspection is an effective means of securing employer compliance and, if targeted at key groups, can bring about significant improvements in health and safety performance."

Löfstedt nevertheless believes there is scope for the HSE "to improve its enforcement of health and safety regulation, particularly when bringing prosecutions". The number of prosecutions is not, he notes, "particularly excessive", even though they are an "important deterrent and driver of compliance". And although the majority of prosecutions are dealt with quickly and efficiently, this is not always the case and he recommends "that all those involved should work together with the aim of commencing health and safety prosecutions within three years of an incident occurring". He notes, too, the recent changes to the "Work-related death protocol", which will allow (but not require) the HSE to bring prosecutions before a coroner's inquest, thereby reducing the excessive delay in some cases.

"Real inconsistency" in local enforcement

Löfstedt does stray beyond his scope, however, to look at the enforcement division between the HSE and LAs, which is set out in the Health and Safety (Enforcing Authority) Regulations 1998. In a nutshell, the HSE enforces traditionally higher-risk workplaces, while LAs are responsible for less-risky premises, particularly services. Coupled with this split, LA environmental health officers will enforce food safety, environmental protection and waste management matters as well as health and safety.

This means that health and safety will vary as a priority between LAs and attract differing amounts of resource. This, Löfstedt states, has led to "real inconsistency" in relation to the enforcement of health and safety across LAs. Löfstedt acknowledges the improvements that have been made to LA enforcement following a new HSE/LA partnership that started in 2004, as well as successful initiatives by LA and HSE inspectors to work around these enforcement splits, including the Flexible Warrant scheme (which allows each regulator to enforce on the other's premises in a small number of areas in the country). More fundamentally, the Government is looking to extend the Primary Authority scheme, in which businesses that operate in more than one LA area deal with a single lead LA on regulatory issues, including those arising from health and safety. To date, there are currently 886 partnerships covering 253 businesses and 56 LAs. Löfstedt recommends the HSE should also be the Primary Authority for multi-site national organisations.

The "twin-peaks" problem

The limitation of these initiatives, observes Löfstedt, is that they are largely concerned with working around the split, rather than revising the split itself, which means "there remain persistent and inherent problems". Furthermore, the split is "an artificial barrier to the most efficient targeting of enforcement activity across the board". This creates what has become known as a "twin peaks" problem, in which lower-risk HSE-enforced premises may present higher risks than most premises under LA control, but will be less likely to be inspected because they are at the bottom of the HSE list whereas the LA premises will be at the top of the LA list. This is not a novel diagnosis; indeed the Better Regulation Executive concluded in 2008 that there was a strong case for a fundamental review of the Regulations for the same reasons, while the HSE's 2004 strategy document admitted there is no lasting logic to the split.

The limitations of the enforcement split are important: LAs carry out 196,000 visits per year, whereas the HSE manages 33,000 proactive visits (although the LAs will combine health and safety visits with other issues). The problems, says Löfstedt, "will be further exacerbated" by the Government's announcement earlier in 2011 to reduce proactive inspections by one-third. Löfstedt therefore recommends a change in the legislation "to give the HSE the authority to direct all LA health and safety inspection and enforcement activity, in order to ensure that it is consistent and targeted towards the most risky workplaces". He acknowledges the potential loss of "local knowledge as well as the synergies with other enforcement responsibilities that LAs can currently exploit", but believes this is outweighed by "putting responsibility in the hands of a single organisation dedicated to health and safety, and ensuring that enforcement is not influenced by the range of other concerns that LAs have, which in turn contributes to the continued variation in enforcement across the different LAs." It could also help provide greater assurance and clarity to businesses, many of which "are unable to make a distinction between different regulators".

When "fully supports" means "rejects"

The DWP "fully supports the overall objectives of the recommendation", which is code for it opposes the recommendation itself. The DWP cautions that, in tackling the problems, "we must not create an even more centralised approach that is further removed from local businesses and communities. There remains an important role for local inspectors to use their knowledge and experience to engage with businesses across a range of regulatory issues." Instead, the DWP will work with local government "to improve the quality of training and dispel myths and the fear of litigation, which is why many councils can be over-cautious with their inspections". Accepting the "need for local government to take a more consistent and proportionate approach to enforcement", the DWP advises that the HSE will work with local government and business "to develop a shared national code that is binding and enforceable".

In terms of the Primary Authority, the DWP states that it will make further announcements "soon", in the light of a recent consultation that looked at ways of improving the scheme: "We welcome the HSE working closely with the Local Better Regulation Office, who operate the Primary Authority Scheme, to ensure that the Primary Authority can help deliver reductions in burdens, and increased consistency of approach, in line with HSE policy."

Overall, the DWP believes "that strengthening HSE's policy role for all aspects of health and safety enforcement will deliver better targeted inspections and deliver greater consistency for business. It will also help to address the 'twin peaks' issue and provide the platform for a single regulatory approach to health and safety across Britain." Put another way, it does not envisage either the HSE "directing" LA regulation or becoming the Primary Authority any time soon.

The impingement of civil liability

It is, however, "the prospect and incidence of civil compensation, rather than prosecution by the HSE," writes Löfstedt, "that most employers have concerns about", with 2008 HSE research finding that fear of litigation was "a key cause of disproportionate health and safety management". While there were 78,000 employer liability claims in 2009/10, the HSE, says Löfstedt, took only 1,090 prosecutions in 2008/09. (In fact, the gap is wider than Löfstedt indicates; the 1,090 he cites refers to "informations", of which there can be more than one per case. The number of dutyholders prosecuted by the HSE, LAs and the Procurator Fiscal in Scotland in that year was just 677. By 2010/11, this had fallen to 642.)

In terms of an alleged UK "compensation culture", Löfstedt highlights that the number of employers' liability claims in 2009/10 was almost two-thirds lower than the 220,000 claims made in 2000/01). In what should - but almost certainly will not - be the final word on the issue, Löfstedt states: "The 'compensation culture' (or the perception of it) in the UK has been the subject of several reviews over the last few years, but no evidence has been presented for its existence."

At the same time, he accepts that: "The evidence does seem to suggest the belief in a compensation culture is still having a significant impact on the behaviour and outlook of business, with the [Government's] Better Regulation Task Force concluding that, although it is a myth, the perception of its existence, driven by media coverage, has a significant impact on the behaviour of both public and private employers".

Löfstedt points out that there are significant reforms to the civil justice system under way, arising from the 2008 report by Lord Justice Jackson, including conditional fee arrangements, and that the Young Review supported the Jackson recommendations. Although civil law is outside his scope, which was limited to regulatory law, Löfstedt acknowledges there are "links" between the two systems; while the general duties in the HSW Act are not enforceable under civil law, breaches of most regulations made under the HSW Act are. There is also evidence, states Löfstedt, "to suggest that employers do not make a distinction between health and safety regulation and civil law. So what happens within the civil justice system can affect the perceived burden of regulation. Court judgments that appear inconsistent can add to the confusion over the scope of health and safety law and lead to unnecessary over-compliance." This leads Löfstedt to identify two areas where health and safety regulations "interact" with civil justice and where he claims he is entitled to make recommendations for reform.

Pre-action protocols

The purpose of pre-action protocols has become confused in recent years, Löfstedt believes. Their initial aim had been to support early settlements through improved and earlier exchange of information - set out in a non-exhaustive disclosure list of documents - between the parties in a compensation claim. The list includes 11 documents for disclosure relating to general workplace health and safety requirements, and 64 documents for disclosure where specific health and safety regulations apply. This list, says Löfstedt - and as the Risk and Regulation Advisory Council noted before him - is placing unnecessary burdens on small enterprises because consultants are urging them to "keep very large numbers of records in case they are taken to court". "This could," he fears, be "one reason why employers feel the need to complete risk assessments for every activity and which leads to an emphasis on paperwork at the expense of resources that should be spent controlling risks and improving health and safety." He therefore recommends that the original intention of the pre-action protocol standard disclosure list is clarified and restated, and that the absence of a document is not taken as proof of non-compliance.

The DWP accepts this recommendation, pointing out that the Legal Aid, Sentencing and Punishment of Offenders Bill contains provisions on the reform of no-win, no-fee arrangements, the revision of civil procedure rules to encourage early and fair settlement of negligence claims and the banning of referral fees. The Bill is currently before parliament and its reforms should be implemented during 2012. The Civil Justice Council is currently reviewing pre-action protocols and will, advises the DWP, "take account of the recommendations in the Löfstedt report in taking forward this work".

Making "strict liability" reasonable

Löfstedt's second recommendation concerns the situation whereby some health and safety regulations impose a strict liability on employers, making them legally responsible for the damage and loss caused by their acts and omissions regardless of their culpability and whether or not they have done all that is reasonably practicable. He quotes as an example the Court of Appeal decision in Stark v The Post Office (see box 11). Although Löfstedt acknowledges that some of these duties may be necessary - either in themselves or to comply with European Directives - he believes that "awarding compensation on the basis of a technical breach where there is no opportunity for the defendant to be aware of the danger, and no actions could have been taken to prevent the accident, clearly has the potential to stop employers taking a common-sense approach to health and safety."

Löfstedt therefore recommends that regulatory provisions that impose strict liability should be reviewed by June 2013 and either qualified with "reasonably practicable" where strict liability is not absolutely necessary or amended to prevent civil liability from attaching to a breach of those provisions. The problem here, however, is that many of these instances of strict liability indeed stem from the need to implement EU Directives fully, which means that his recommendation, although it may sound sensible, may struggle in reality.

The DWP believes that the issue of strict liability is not a problem for the enforcement of regulations because inspectors can use their discretion. It accepts, however, that it gives rise to "unfairness" in civil claims and so "will look at ways to redress the balance, in particular preventing civil liability from attaching to a breach of such provisions". Neither the DWP nor Löfstedt, however, explore how - given not just the EU but also the significant case law in the UK - they might achieve this.

Ignore the spin, read the report

The Government's response to the document is perplexing. After Löfstedt spends more than 100 pages rejecting the existence of a "compensation culture" and concluding that the health and safety system is fit for purpose and beneficial to business, although needing improvement, the DWP response states: "The coalition Government came into office determined to tackle the pervasive compensation culture that has deeply damaged the standing of 'health and safety' in the eyes of the public."

The DWP continues: "The Prime Minister summed up the feelings of many when he said that '... all too often, good health and safety legislation designed to protect people from major hazards has been extended inappropriately to cover every walk of life, no matter how low risk.'" What Löfstedt actually writes is that some respondents to his call for evidence agreed with Lord Young's view that regulations designed for high-hazard or high-risk industries "have been extended inappropriately and disproportionately to other workplaces where risks are much lower". The supporting evidence he cites is limited and minor and, without explicitly disagreeing with Young and the Prime Minister, Löfstedt instead observes: "The broad goal-setting approach at the core of health and safety regulation should ensure that it is adaptable to different risks and working conditions and that the measures employers need to take to comply should be proportionate to the risk." (It is a pity, incidentally, that this approach should fail Löfstedt himself when it comes to the self-employed.)

And, in what is a clear disagreement with the simplicity of Young's outlook, he adds: "Furthermore, there is a question of how to define low risk, as although health and safety has traditionally focused on safety concerns in certain industries, evidence has been provided to show that occupational health conditions can occur in the kinds of workplaces that are traditionally considered less risky", such as offices, the service industry, social work and education. (Unfortunately - and this is a significant weakness in the report - he makes no recommendations that would grapple with the problem of ill health.)

Young again

What is not clear is whether the Government will accept the spirit as well as the detail of Löfstedt's review or whether it will continue with its headline-grabbing approach. One indicator is the October 2011 return of Lord Young to Downing Street as the Prime Minister's enterprise and anti-red tape cheerleader (with particular focus on health and safety). Young resigned from a similar post in late 2010 in the wake of some highly insensitive remarks, just weeks after publication of his "Common sense. Common safety" review. One month before the publication of Löfstedt's review, the Prime Minister invited Young back. This is unlikely to prove mere coincidence.

Overall, Löfstedt concludes that "in general, there is no case for radically altering current health and safety legislation", but that there is a need for changes that stop businesses going "beyond what the regulations require and beyond what is proportionate". Furthermore: "There is a view across the board that the existing regulatory requirements are broadly right, and that regulation has a role to play in preventing injury and ill health in the workplace. Indeed, there is evidence to suggest that proportionate risk management can make good business sense." This is a far cry from the review's core - and highly prejudicial - term of reference that Löfstedt should "consider the opportunities for reducing the burden of health and safety legislation on UK businesses".