New Study Shows Health & Safety Compliance is Third Largest Cost to Small Businesses

The average small business in the UK is spending £1146 a year on external health and safety support. A new study has shown that the third largest compliance costs faced by small- and medium-sized businesses (SMEs) is on health and safety compliance, with this sector spending £3.7 billion a year to make sure they are following the letter of the law. The Forum of Private Business (FPB) carried out research which found that compliance with health and safety law followed only taxation and employment law compliance as the largest outlays for British small businesses.

The importance of maintaining good health and safety practices is clear, for businesses as well as their employees and contractors. The FPB research revealed that, despite the high ranking of health and safety in terms of spending on outside contractors, the actual money spent had reduced since the Forum’s previous survey in 2011 (during which SMEs spent £3.8 billion). Further reductions are expected, once the changes which are due to go live in October are underway. Robert Downes, policy advisor for the FPB, explained, “The changes in October should really see H&S costs come down as the onus shifts to employees having to take more of a responsibility for their own safety in the workplace, and the end of strict liability for employer will mean firms can't be held responsible for accidents beyond their control”.

Companies who are working hard to make sure they comply with existing Health and Safety law are right to spend time and money to achieve this. The laws and regulations are complex, and depending on the industry they are in they might find they need external help and advice to ensure that they have understood what is required of them and that they are carrying it out correctly. While an industry-wide spend of £3.7 billion sounds like a huge outlay, internal company costs and time dedicated to this area have actually dropped. It appears to be outsourcing expenditure – thanks to a 43% jump in the amount spent on hiring external specialists – which has kept the amount so large.

The change that is expected later this year that Robert Downes says will reduce red tape is the removal of strict liability, which will spread out the responsibility for health and safety breaches between more responsible parties. In an online comment Adrian Plimmer, Health and Safety Manager at Vax Limited, fears that this legislation change will lead to employees being blamed for their own accidents. He said, “H&S law needs clarity, insurance companies have to be restricted with their 'claims culture', and H&S professionals have to go out and win hearts and minds. Otherwise people are going to die and be injured needlessly”.

The impact of the upcoming changes remains to be seen, in terms of the effect it has on accidents and injuries, as well as whether it is successful at reducing the costs faced by businesses as they do their best to assure good health and safety practices in their staff, contractors and customers. For the time being, SMEs’ expenditure on health and safety internal and outsourced work will no doubt be monitored so that it can continue to be measured and analysed over time.

(Photo Credit: Department for Communities and Local Government)

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