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Keeping people at work: bringing prevention, rehabilitation and compensation together

Issue date

relocating the HSC/E

arguments for joining up prevention, rehabilitation and

compensation in the Department for Work and Pensions

With the division of the Department of Transport, Local Government and the Regions (DTLR) into two departments, there is an opportunity to relocate the Health and Safety Commission/Executive (HSC/E). This paper sets out the main challenges which the HSC/E faces, and argues the case for creating a unified prevention, rehabilitation and compensation system in Great Britain under the Department of Work and Pensions.

the challenges

The Government and the HSC/E are committed to challenging targets for reducing injury and illness - by the year 2010, the Revitalising health and safety strategy launched in 2000 envisages a 10% reduction in fatalities and major injuries, a 20% reduction in occupational illness and a 30% reduction in resulting sickness absence. Without a major effort on rehabilitation to cut the length of time people are absent from work, and without more effective prevention, these targets will not be met.

It is vital that they are met. The costs to business, to the economy as a whole and especially to individuals are unsustainable. People off work are claiming benefits and not paying taxes, employers are losing skilled workers and paying for sick pay and compensation. Altogether, the HSE estimates that work-related illness and injury costs society up to £19 billion a year.

In a tightening labour market, the permanent loss to the labour market due to workplace injury or illness of 27,000 people a year is contributing to skill shortages and social exclusion - the number of people on disability benefits now exceeds the number of people unemployed. Even short-term absences can have a devastating effect - one health service manager has estimated that if he could eliminate work-related injury and illness absence among his nurses, he could scrap all his agency contracts!

Britain’s record on preventing workplace injuries and illness is, by international standards, good. Very few nations have a lower workplace fatality rate, and the number of fatalities at work in Britain has declined substantially since the HSC/E was created in 1974. But concerns that the improvements had ceased in the mid1990s led the Government to develop the Revitalising health and safety strategy.

Our record on rehabilitation, by contrast, is appalling. The Association of British Insurers estimates that the chances of returning to work after a major injury are 50% in Sweden, 30% in the USA and just 15% in Britain. Hundreds of thousands of workers in Britain with relatively simple musculo-skeletal complaints and stress-related illnesses are taking extended time off work or retiring prematurely when rehabilitation could get them back to work in weeks.

And finally, our compensation system, while hardly generous, pays out nearly £1.5 billion a year for workplace injury and illness through civil compensation and state benefits, to about half a million people. Often the recipients are left in poverty and on benefits for the rest of their lives, rather than returned to work as swiftly, and cost effectively, as possible.

joining up Government

All Government departments employ people, so they all have an interest in better prevention, rehabilitation and compensation systems. But some have other interests - the main ones are:

  • DTLR was responsible for the HSE itself, for local authority enforcers of health and safety legislation, and for certain compensation arrangements (overseeing employer liability compensation and the Pneumoconiosis scheme);

  • the Department for Work and Pensions (DWP) runs the Industrial Injuries Disablement Benefit (IIDB) scheme, as well as incapacity benefits generally, and is responsible for return to work policies for people out of work due to disability;

  • the Department of Health runs the NHS Plus system of selling NHS occupational health services, it is responsible for treating acute and in some cases chronic workplace conditions;

  • the Lord Chancellor’s Department is responsible for the civil justice system under which workplace injury and illness victims sue their employers.

There will always be overlaps between Government departments over areas like prevention, rehabilitation and compensation, but at the moment, there are some glaring inconsistencies and some major gaps in the system which act to reduce its efficiency. But there is no central, powerful authority to counteract such overlaps and gaps.

two examples

The tax system treats some rehabilitation services as employee perks, especially in the field of stress counselling - which acts as a disincentive to providing these services - and does not treat expenditure on prevention or rehabilitation as investment to be encouraged by tax breaks.

The benefit system makes it difficult for people who have left work due to injury or illness to return, because it is based on the idea that people are either fully fit or incapable of work. This is inimical to a system of rehabilitation and return to work, but echoes what happens in the private sector: in one case, a person had to take leave so that she could work mornings as part of a return to work plan, because her employer had no provision for part-time work!

international examples

Across the world, there are many different ways of organising the interfaces between prevention, rehabilitation and compensation. As noted above, most countries have a worse record on prevention than Britain, suggesting that we have little to learn. But most countries do better at rehabilitation, and creating better links with rehabilitation and compensation could well provide the boost to prevention needed to restore the previous downwards trend in the statistics which reached a plateau in the mid 1990s.

In Australia, for example, the state preventive systems are also responsible for rehabilitation arrangements, which ensures that rehabilitation is centred on the workplace (although medical treatment is still provided by the health care system), and is specifically aimed at returning people to work. In Germany and France, in different ways, the workers’ compensation bodies are responsible for not only insurance and compensation, but also advice to enterprises on prevention, and in Germany, the sectoral bodies also oversee enforcement of safety laws.

potential benefits

The main benefits which might flow from bringing prevention, rehabilitation and compensation together would be lower levels of sickness absence, lower rates of injury and illness, and lower levels of compensation. In addition, the changes proposed could lead to:

  • a spur to developing better rehabilitation provision, because both the major policy makers and the main funders (the duty holders under health and safety, the benefit providers and the state and private compensators) would be brought together;

  • encouragement of better and earlier reporting - at the moment, British injury and illness statistics are acknowledged as being very poor, which means that evidence based policy making and assessing the effectiveness of interventions is difficult. At present, there is no real incentive to report or notify occupational injuries or illnesses, because that (health and safety) process is separate from the possible incentives to reporting (eg compensation);

  • a virtuous circle could be created for prevention, rehabilitation and compensation funding, where improvements in prevention and in rehabilitation could deliver lower benefit payments and the resulting savings could provide an incentive for further prevention and rehabilitation efforts by making it possible to directly reinvest those savings rather than requiring inter-departmental transfers;

  • a 'lifecycle' approach to injury and illness and compensation could speed up the process whereby an injury victim is assessed, treated, retrained and rehabilitated and reduce the interfaces between different stages in the process;

  • a greater focus on the outcome of health and safety rather than the process, because achievements would be more clearly measurable in terms of the number of people leaving the labour market, claiming benefits etc; and

  • HSE’s enforcement role would be kept separate and clearly independent from departmental responsibilities for economic regulation and sponsorship, as exist in the DTI (chemicals, gas, nuclear and oil), DfT (transport, especially rail) and even the Department of Health (the NHS is one of the priority sectors for the HSC).

possible threats

There are always downsides as well as advantages to changes in the machinery of Government. Bringing prevention, rehabilitation and compensation together could lead to:

  • a loss of focus on the main high hazard industries, where injury and illness rates are low, such as the nuclear industry, or with those sectors which HSC has prioritised such as construction - but this is balanced by the independence of the regulator, and by the concentration instead on those hazards which cause most sickness absence and compensation claims, eg stress, RSI, back strain and asbestos;

  • raised awareness among those with occupational injury and illness of their entitlement to compensation, leading to greater expenditure in the short term - but for some this might well be seen as a good thing, making sure people get what they are entitled to, there will be greater equity (at present, those 'in the know' get more than those without such knowledge), and the true costs of injury and illness will become more transparent where now they are partly hidden by lack of take-up, lack of reporting etc; and

  • the DWP might adopt a 'balance the books' approach, focusing on rehabilitation activity that reduces expenditure on benefits at the expense of preventing injuries in the first place. However, this might in fact be a sensible way of setting priorities, and if prevention and rehabilitation really are 'good business' then it is likely that all prevention and rehabilitation will pay off handsomely, thus expanding the availability of prevention and rehabilitation overall, rather than merely replacing prevention with rehabilitation.

proposals

On balance, the TUC believes that the DWP is the best home for the HSC/E. We believe that:

  • HSC/E should be transferred to the DWP, as part of a section linking HSC/E with return to work policies and disability benefits like IIDB ; and

  • that section, and a senior Minister, should be given the responsibility to develop an integrated strategy for prevention, rehabilitation and compensation.
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